ECONOMIC WEEK AHEAD: Data points will remain contained
The week ahead will see the release of producer inflation, private sector credit extension and trade balance data
The week ahead will see the release of April’s producer price index (PPI) for manufactured goods on Thursday, as well as the release of April’s private sector credit extension and trade balance data on Friday. Just a week after consumer inflation eased, data from Statistics SA will likely show that farm and factory gate inflation, as measured by the annual change in the producer price index eased slightly from March’s 6.2% — but economists say it will still remain at about 6%. Producer inflation was historically viewed as foreshadowing consumer inflation, which is the key benchmark used by the Reserve Bank’s monetary policy committee to set interest rates. But with modern logistics, producer inflation tends to move in tandem with consumer inflation, but swings more wildly because retailers try to keep prices “sticky” to avoid upsetting customers. The manufacturing PMI survey for April pointed to an easing in operating cost inflation linked to a slightly stronger rand compared to ...
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