PPI comes in at 7.3% in February

Thursday, March 26, 2009

Pretoria - The Producer Price Index in February 2009 has come in at 7.3 percent year on year, which is 1.9 percent lower than January's figure of 9.2 percent year on year, Statistics South Africa (StatsSA) announced on Thursday.

This is the sixth consecutive decrease in the CPI headline number.

The latest PPI statistics are released against the backdrop of deepening global and domestic economic difficulties, which has resulted in the country's fourth quarter 2008 Gross Domestic Product (GDP) figure sinking into the red for the first time in a decade.

Stats SA attributed the rate in February to decreases in the annual rate of change for basic metals (from 50.9 to 42.1 percentage points), non-electrical machinery and equipment (from 24.8 to 15.7) and fishing (24.0 to 11.8).

From January 2009 to February 2009 the PPI for exported commodities increased by 0.1 percent, while the PPI for imported commodities decreased by 2.9 percent from January 2009 to February 2009

The Consumer Price Index (CPI) figure, which is the Reserve Bank's new inflation measure, came out at 8.6 percent in February 2009, which was higher than economists had expected.

The new reweighted and rebased CPI was expected to bring the country's inflation figure down to 7.7 percent from 8.6 percent for 2008.

The old inflation indicator, the Consumer Price Index, which excluded interest on mortgage bonds (CPIX) has now been replaced by the CPI which excludes owners equivalent rent.

The new CPI basket can be considered an up-to-date reflection of current prices in South Africa and includes inflation on minibus taxi fares, restaurant and take-away meals, funeral costs, hotel rooms, sports event tickets, DVD players and internet costs, amongst others.

Some items which have been removed from the CPI basket of goods include caravans and boats, musical instruments, VHS recorders and VHS cassettes.

The rebasing and reweighting of the CPI basket, which came into effect in January, was done to make the CPI more relevant to South African consumers.