PPI sharply up at 8,9%

26 Aug 2011

Producer price inflation increased by 8,9% in July mainly as a result of higher costs of fuel, food and electricity according to a report published in Business Report. The figures from Statistics South Africa show that the cost of goods leaving South African factories had increased by more than analysts had expected and will gradually feed through to the consumers.

Business Report says that the higher PPI may not be sufficient to spur the Reserve Bank to increase interest rates when the Monetary Policy Committee meets later this year, as an increase in interest rates could hamper South Africa's growth rate.

Meanwhile, Business Live says that exports had increase by 5,9% year-on-year despite the higher PPI levels and imports were 10,2% higher in July. It says that the higher electricity prices had contributed three percentage points to the annual PPI level in July

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