Producer inflation slows to below 6%
Farm and factory gate inflation moderated to 5.8% year on year in June
Producer inflation has slowed to the upper end of the Reserve Bank target of 6% for the first time in three months, thanks to slower fuel prices .
Producer inflation partially foreshadows consumer inflation, which is the key benchmark used by the Reserve Bank’s monetary policy committee (MPC) in setting interest rates. However, the relationship is not perfect, as producers often seek to absorb price pressures to retain market share.