The Producer Price Index (PPI) slowed to 10.1% in November, Statistics South Africa (Stats SA) said on Thursday.
Analysts had expected it to come in at 10.6% year-on-year.
“This rate is 0.5 of a percentage point lower than the corresponding annual rate of 10.6% in October 2011,” said Stats SA.
It attributed the reduction to decreases in mining and quarrying and electricity.
“These decreases were partially counteracted by increases in the annual rate of change for products of petroleum and coal, electrical machinery and apparatus and basic metals,” said Stats SA.
Standard Bank said the data gives the Reserve Bank room to leave rates unchanged at 5.5%.
“Slowing prices may give the Reserve Bank room to leave rates unchanged. The Reserve Bank is likely to remain on hold in 2012, but should inflationary pressures reach critical levels in an environment of sluggish growth, we may see an intervention,” said Standard Bank.
PPI is the price of goods leaving factories and mines. – BuaNews
