PPI drops to 4.1 percent

Thursday, July 30, 2009

Pretoria - The Producer Price Index (PPI), the prices of goods leaving factories and mines, dropped to 4.1 percent year-on-year, Statistics South Africa (StatsSA) announced on Thursday.

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

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.

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

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