South Africa Producer Prices Surge Most in Almost Two Years

(Bloomberg) -- South African producer prices rallied the most in almost two years in October as gasoline prices surged to a record.

Annual producer inflation for final manufactured goods accelerated to 6.9 percent from 6.2 percent a month earlier, Pretoria-based Statistics South Africa said in a statement on its website Thursday. The median estimate in a Bloomberg survey was for 6.3 percent.

South Africa Producer Prices Surge Most in Almost Two Years

Key Insights:

  • The retail price of gasoline increased 22 percent over the past year to a record high in October, adding to pressure on consumer spending.
  • The government, which regulates gasoline prices in the country monthly, may reduce the benchmark price of fuel in the economic hub of Gauteng by 1.89 rand ($0.14) a liter (0.3 gallon) in December, data on the website of the Department of Energy’s Central Energy Fund show.
  • The PPI figure won’t impress the Monetary Policy Committee, which targets a consumer-inflation range of 3 percent to 6 percent. The annual increase in the consumer-price index breached 5 percent for the second time this year in October.
  • The central bank increased its key lending rate for the first time in more than two years last week, citing risks to the inflation outlook. The regulator will address the wider second-round effects of higher prices in its policy making and won’t respond to short-term moves, Deputy Governor Daniel Mminele said this week.

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