Last year the PPI was at 6,9%. Times Live reports that economist Carmen Altenkirch from Nedbank says that the rise will push prices up at the manufacturing level over the next few months.
The higher prices will make if difficult for the South African Reserve Bank's Monetary Policy Committee to refrain from increasing interest rates if the effects of the higher producer prices filter through to the consumers, lifting the Consumer Price Index.
Business Report quoted Reserve Bank governor, Gill Marcus, who warned last week that year-on-year producer price inflation had displayed some volatility, partly as a result of commodity price fluctuations. The report states that food prices had risen by 7,3% year-on-year in June and fuel increased by 21% while electricity was up 19%.
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