The Producer Price Index (PPI) fell to 4.2% year-on-year in September from 5.1% in August, said Statistics South Africa (Stats SA)yesterday.
“PPI for domestic output shows an annual rate of change of +4.2% in September 2012. This rate is 0.9 of a percentage point lower than the corresponding annual rate of +5,1% in August 2012,” said Stats SA.
Market consensus was for a 5.4% year-on-year increase. PPI is the price of goods leaving factories and mines.
The decrease could be explained by decreases in the annual rate of change in PPI for electricity, mining and quarrying and basic metals among others.
On a month-on-month basis, PPI decreased by 4%.
Producer inflation could moderate further in the coming months as softer global demand contains prices of certain commodities, said Nedbank economists in a research note. A weaker rand as well as higher oil and food prices pose upside risks, it said.
Meanwhile, Standard Bank said it believed the scope for monetary policy relaxation was limited at the upcoming November and January 2013 Monetary Policy Committee meetings. – SAnews.gov.za