PPI decreased to 4.2% in July

Statistics South Africa says annual Producer Price Inflation (PPI) for final manufactured goods decreased from 4.6% in June to 4.2% in July.

Stats SA says the main contributors to the month-on-month decline included petrol, chemical, rubber and plastic products.

This latest figure comes on the heels of a drop in Consumer Price Inflation (PPI), which fell to 4.6%, moving closer to the midpoint of the Reserve Bank’s target range of 3 to 6%.

Economic Analyst at Momentum Group Tiamo Masike says reduced inflation data increases the likelihood that the central bank will lower interest rates next month.

“We may however see a small impact on inflation in 2025/2026. The impact is expected to be small because not everyone who withdraws from their pension is expected to spend the money on goods and services, we do expect that some of the consumers who withdraw from their pension will pay down some of their debt.”