Factory and farm gate inflation, as measured by the annual change in the producer price index (PPI), accelerated to 6.3% in August from 6.1% in July. Producer inflation was expected to accelerate slightly in August due to a fifth consecutive monthly increase in petrol and diesel prices due to the weaker rand. While August’s fuel price increases were relatively small at 1c/l and 4c/l for petrol and diesel respectively, they still weighed on producer inflation. This translated into diesel’s contribution to PPI showing 27.7% annual inflation in August while the petrol component of PPI showed 25.3% annual inflation. Transport equipment, which increased by 10.9% in August, also drove up producer inflation. PPI, which was set to 100 points in December 2016, came in at 109.2 points in August, up from July’s 108.5 points. From July 2018 to August 2018 the PPI for final manufactured goods increased by 0.6%. FNB chief economist Mamello Matikinca expected the index to have increase slightly du...

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