Pretoria - The Producer Price Index (PPI) eased to 6.8 percent in September, Statistics South Africa (Stats SA) said on Thursday.
Stats SA said the lower annual rate in comparison to the August figure of 7.8 percent could be explained by decreases in the annual rate of change in indices for agriculture, products of petroleum and coal and electricity which decreased from 23.1 percent in August to 17.2 in September.
Analysts were expecting the PPI to rise to 8.9 percent year-on-year while others had predicted it would come in at 8.2 percent year-on-year.
Absa Capital predicted the PPI would rise to 8.7 percent in September. "Base effects and some strong commodity price gains in the month underpin our forecast," Absa Capital said earlier today.
Nedbank said weak demand locally and globally, low input costs as well as the strong rand would help contain price increases of manufactured goods.
"We expect the Reserve Bank's Monetary Policy Committee to pause over the next two meetings, with a possible 50 basis point cut in March next year. However, the continued improvement in the inflation outlook as well as the strength of the rand may prompt them to act sooner," said Nedbank
PPI is the price of goods leaving factory gates and mines.
