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PPI drops to 4.1%

30 Jul 2009

The Producer Price Index (PPI), the prices of goods leaving factories and mines, dropped to 4.1% year-on-year, Statistics South Africa (Stats SA) announced on Thursday, 30 July 2009.

June's rate is 1.1 percentage points lower than the corresponding annual rate of 3.0% recorded in May, said Stats SA.

The lower PPI figure was due to decreases in the price indices of petroleum and coal products, mining, transport equipment, textile goods, food and manufacturing, metal products, forestry and agricultural products.

Stats SA said on Wednesday that the Consumer Price Index (CPI), used to measure inflation, had dropped to 6.9% in June compared to 8% in May.

This data comes as the domestic economy continues to show signs of stress as a result of the global downturn.

The South African Reserve Bank ended a streak of repo rate cuts in June, leaving it unchanged at 7.5% per annum. Since December, the committee had cut the repo rate by 450 basis points.

Economists expect the MPC to keep the repo rate unchanged again when they meet in August.

Article published courtesy of BuaNews