South Africa: SA Factory Gate Prices Jumped 16.2 Percent in June, the Fastest Rate in 14 Years

South Africa's producer price index sprinted on an annual basis to 16.2% in June, its highest level in almost 14 years, from 14.7% in May. Roaring oil and food prices remain the main drivers, cementing the view that more interest rate hikes are in the pipeline.

The data, released on Thursday by Statistics South Africa (Stats SA), clearly underscores the inflationary vice that has the South African -- and for that matter the global -- economy firmly in its grip. Consumers will ultimately pay even higher prices for a range of goods as a result.

At 16.2% year on year, domestic PPI is now at its highest level since August 2008, when it reached 19.1%. CPI is at a 13-year high, though at a more subdued 7.4%.

The South African Reserve Bank will see this data as further evidence that its 75-basis point rate hike last week -- which took the cumulative rise in rates since November last year to 200 basis points and the prime rate to 9% -- was not excessive. Critics would counter that inflation is being fanned by external factors, including Russia's invasion of Ukraine, and that higher rates will do little to contain price pressures...

AllAfrica publishes around 600 reports a day from more than 100 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.

X