Producer price inflation in South Africa has hit a two-year low, according to data from Stats SA.
The decline in inflation was driven by a drop in manufactured food price inflation, as well as a significant decrease in petrol and diesel prices in June.
- Producer price inflation fell to 4.8% in June, down from 7.3% in May and 8.6% in April.
- The June reading was below Reuters’ consensus forecast of 6%.
- Despite the easing of food prices, risks in global agriculture and load-shedding continue to threaten producer price relief.
- The data suggests that inflationary pressures in South Africa may be easing, which could have positive implications for consumers and the economy.
- The Reserve Bank of South Africa has been under pressure to keep interest rates low to support economic growth, but rising inflation has made this difficult.
- The latest data on producer price inflation will be welcome news for the Reserve Bank as it considers its next move on interest rates.