PPI slows its gallop to 16.6%

Annual producer inflation moderated in August but still had its second-highest reading since the series began in 2013 with its ninth successive month of double-digit readings, according to Stats SA. The producer price index (PPI) was up 16.6% year on year in August.

Annual producer inflation moderated in August but still had its second-highest reading since the series began in 2013 with its ninth successive month of double-digit readings, according to Stats SA.

The producer price index (PPI), which measures changes in prices of goods bought and sold by manufacturers, was up 16.6% year on year in August, below market forecasts of 17%.

The index moderated 0.5% month on month compared with some estimates of a 0.7% acceleration.

PPI data is a key indicator of future consumer inflation. The economy remains under pressure due to load-shedding and also global issues such as the Ukraine war, supply chain disruption and China’s zero-Covid19 policy.

Economists said earlier that they expected producer inflation to moderate in August as the prices of petrol and diesel fell, benefiting businesses and consumers.

Biggest contributors to the latest reading of the index were coke, petroleum, chemical, rubber and plastic products, which rose 37.6% year on year, adding 9.4 percentage points.

Then came food products, beverages and tobacco products, which rose 11.6% year on year, contributing three percentage points.

The third major contributor was metals, machinery and computing equipment increasing 10.8% year on year and contributing 1.6 percentage points.