The lagged effects of commodity price increases are expected to have contributed to a lift in producer price inflation in April‚ says Investec economist Kamilla Kaplan.
The PPI data for March will be released on Thursday by Statistics South Africa.
“Producer price inflation is forecast to have lifted to 7.4% year on year (y/y) in April from 7.1% y/y previously‚ with the lagged effects of commodity price increases and rand exchange rate developments taking effect‚” says Kaplan.
She points out that most commodity prices rebounded in the last three months from January lows‚ supported by a weaker US dollar and improved market risk appetite.
“In particular‚ spot oil prices have risen by nearly US$15 per barrel to US$49.4 per barrel during this period. In rand terms‚ although still lower than a year earlier‚ spot oil prices have risen by 41%.
“Business survey indicators of producer prices‚ such as the manufacturing PMI‚ although subsiding since the turn of the year‚ have remained elevated‚ reflecting higher commodity prices‚ electricity and labour costs‚ as well as weaker currency effects‚” adds Kaplan.
Lagged effects of commodity price increases to contribute to lift in PPI inflation in April
The lagged effects of commodity price increases are expected to have contributed to a lift in producer price inflation in April‚ says Investec economist Kamilla Kaplan.
The PPI data for March will be released on Thursday by Statistics South Africa.
“Producer price inflation is forecast to have lifted to 7.4% year on year (y/y) in April from 7.1% y/y previously‚ with the lagged effects of commodity price increases and rand exchange rate developments taking effect‚” says Kaplan.
She points out that most commodity prices rebounded in the last three months from January lows‚ supported by a weaker US dollar and improved market risk appetite.
“In particular‚ spot oil prices have risen by nearly US$15 per barrel to US$49.4 per barrel during this period. In rand terms‚ although still lower than a year earlier‚ spot oil prices have risen by 41%.
“Business survey indicators of producer prices‚ such as the manufacturing PMI‚ although subsiding since the turn of the year‚ have remained elevated‚ reflecting higher commodity prices‚ electricity and labour costs‚ as well as weaker currency effects‚” adds Kaplan.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos