Production prices were up slightly in May in line with economists’ expectations. The annual percentage change in the production price index (PPI) for final manufactured goods was 4.8% in May 2017, compared with 4.6% in April 2017. From March 2017 to April 2017, the PPI for final manufactured goods increased 0.5%. The main contributors to the annual rate of were food products, beverages and tobacco products (1.9 percentage points) and coke, petroleum, chemical, rubber and plastic products (1.6 percentage points). At 25.17%, the food category makes up the largest portion of PPI. Investec economist Kamilla Kaplan said last week that inflation would lift marginally "with some upward pressure arising from the fuel price component. The May PPI update is also likely to reflect ongoing manufactured food price disinflation and deflation at the agricultural level."
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