{"id":707306,"date":"2023-07-27T12:56:22","date_gmt":"2023-07-27T10:56:22","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=707306"},"modified":"2023-07-27T12:56:22","modified_gmt":"2023-07-27T10:56:22","slug":"more-relief-for-businesses-and-consumers-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/707306\/more-relief-for-businesses-and-consumers-in-south-africa\/","title":{"rendered":"More relief for businesses and consumers in South Africa"},"content":{"rendered":"\n

South Africa’s Producer Price Inflation (PPI) eased in June 2023 to 4.8%, down significantly from the rate of 7.3% in May 2023.<\/p>\n\n\n\n

The PPI is now at its lowest point since March 2021, when it was recorded at 5.2%, and is far off from the peak hit in July 2022 when it reached 18%.<\/p>\n\n\n\n

This points to much lower production costs in the country – which spells great news for South Africa’s headline consumer inflation rate going forward.<\/p>\n\n\n\n

The country’s latest CPI figures already showed a significant drop in CPI for June to 5.4%, down from 6.3% YoY in May, bringing the inflation rate within the Reserve Bank’s target range.<\/p>\n\n\n\n

The easing of headline inflation contributed to the Reserve Bank’s Monetary Policy Committee holding on interest rates at its latest meeting.<\/p>\n\n\n\n

While the central bank has warned that the interest rate hike cycle has only been paused – saying that future hikes could be coming, depending on the data – the PPI indicates that consumer prices will continue to ease.<\/p>\n\n\n

\n
\"\"<\/a><\/figure><\/div>\n\n\n

According to Stats SA, while headline PPI has dropped significantly, some sectors are still seeing higher production costs.<\/p>\n\n\n\n

Specifically, food products, beverages and tobacco costs increased by 6.4% year-on-year and contributed 1,6 percentage points to the rate.<\/p>\n\n\n\n

Paper and printed products increased by 14.5% year-on-year; transport equipment increased by 11.3% year-on-year; and metals, machinery, equipment and computing equipment production costs increased by 6.2% year-on-year.<\/p>\n\n\n\n

Conversely, coke, petroleum, chemical, rubber and plastic product production costs decreased by 1.6%, the stats body said.<\/p>\n\n\n\n

Production costs are affected by a host of factors – in South Africa, a weaker rand and permanent load shedding have been some of the key local contributors to these costs.<\/p>\n\n\n\n

As global supply chains and imports\/exports stabilise, the local economy will still be under pressure from these factors.<\/p>\n\n\n\n

This is how the various sectors performed:<\/p>\n\n\n\n