South Africa's producer price index slowed to 7.3% on an annual basis in May from 8.6% in April. This follows a significant softening of consumer inflation in the same month. But hopes that rate hikes may end soon have been tempered by hawkish comments this week by South African Reserve Bank Governor Lesetja Kganyago.

The producer price index (PPI) data, unveiled by Stats SA on Thursday, is the latest sign that the cost-of-living crisis may finally be easing. It follows the braking of South Africa's consumer price index to 6.3% in May from 6.8% in April.

The CPI read, which came in at a slower rate than economists expected, raised hopes that the South African Reserve Bank's tightening cycle was nearing its end, and the PPI number should support that viewpoint.

But the SA Reserve Bank's Lesetja Kganyago has warned before that the central bank is serious about containing inflation and he made hawkish comments on Wednesday, signalling that interest rates, currently at 14-year highs, will stay elevated for longer.

"What is in no doubt is that policy is going to have to remain tight for a little bit longer than the market had been pricing. And the reason has been that inflation has been more persistent than we had thought," Kganyago told Bloomberg TV on Wednesday.

The SA Reserve Bank's Monetary Policy Committee has hiked rates 10 consecutive times for a total of 475 basis points, taking the prime lending rate to 11.75%. This is adding to the burden of many cash-strapped households....