South African producer-price inflation was unchanged in June, higher than economists expected, easing pressure on the central bank to cut interest rates to spur Africa’s largest economy.
The cost of goods leaving factories and mines increased 6.6 percent from a year earlier, Pretoria-based Statistics South Africa said on its website today. The median estimate of 10 economists surveyed by Bloomberg was 5.9 percent. Prices rose 4.4 percent in the month.
The increase was “mainly due to higher electricity tariffs,” Nedbank Group Ltd. (NED), South Africa’s fourth-biggest bank, said in an e-mailed note to clients. “Producer inflation is expected to moderate in the months ahead.” Interest rates “will remain stable well into 2013,” the lender said.
The Reserve Bank last week cut its benchmark lending rate by half a percentage point to 5 percent to help buffer the economy from a slowdown in Europe as a debt crisis in the region curbs demand for exports. The bank lowered its growth forecast for this year to 2.7 percent from 2.9 percent.
Eskom Holdings SOC Ltd., the state-owned power utility, raised tariffs by 16 percent this year, partially offsetting the benefits of lower commodity prices on inflation. The rand has dropped 8 percent against the dollar since the beginning of May, raising import costs.
The rand was at 8.3177 against the dollar as of 1:05 p.m. in Johannesburg from 8.4242 before the data was released.
Rising producer costs may add to pressure on consumer-price inflation, which slowed to 5.5 percent in June from 5.7 percent the month before. The central bank, which is required to keep consumer-price inflation within a range of 3 percent to 6 percent, expects the rate to average 5.6 percent this year.
Traders have been boosting bets the Reserve Bank will cut the repurchase rate again before the end of the year as inflation and growth slow. The yield on forward-rate agreements due in December fell 54 basis points, or 0.54 percentage points, to 4.7 percent in the past month.
Next year, the statistics agency plans to split the producer-price index into five separate measures -- agriculture, mining, electricity and water, intermediate manufacturing and final manufacturing -- and won’t publish an aggregate headline index.
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