PRODUCER INFLATION
Low food prices to ease pain
The decline in food inflation may be offset by higher meat and petrol prices
Food prices are expected to drop despite factory prices surpassing inflation expectations in December 2016. BNP Paribas economist Jeffrey Schultz said headline producer price inflation was expected to ease in the first quarter of 2017 and drop further in the second half of the year. Final manufactured goods inflation rose 7.1% in December 2016, fuelled by higher food inflation, beverages and tobacco products, Statistics SA data showed on Thursday. The high food inflation has been attributed to drought. The market had expected producer inflation to remain steady at 6.9%. Higher prices for metals, machinery and computing equipment, as well as coke, rubber and plastic products, contributed to the high inflation on an annual comparison. Producer inflation was 6.9% in November. The 0.2 percentage point difference was attributable to nonmetallic mineral products and transport equipment. Manufactured food price growth remained elevated in December at 12.2%, but the price pressure reduced s...
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