By Oyisa George
Due to higher costs for food, metals, and machinery, South African producer prices increased last month more quickly than economists had predicted.
According to figures released on Thursday by Statistics South Africa, a Pretoria-based organisation, the annual rate increased from 2.7% in July to 4.3% in August, above all eight projections made by analysts in a Bloomberg survey. 3.7% was the forecast’s median value.
Municipal rates are surveyed by Stats SA in July and August, as was noted in the July CPI overview1. The 2023 survey’s final set of data is from August. Electricity rates rose by 15,3% in 2023, a significant increase over the 7,9% increase seen in 2022. The cost of water increased by 9,6% for households in 2023 after being hit most by an 8,1% increase the year before. Following a 4,3% increase in 2022, property rates increased by 8,4%.
“In 2023, Western Cape residents experienced the biggest increases in both electricity tariffs (up 17,0%) and property rates (up 11,0%). Residents in KwaZulu-Natal recorded the largest rise in water charges (up 14,2%), followed by Gauteng (up 10,0%),” says Stats SA.
The increase in the prices of food, beverages, and tobacco products as well as metals, machinery, and computer equipment, which each contributed 1.3 and 1.4 percentage points to the annual rate, were the main drivers of producer inflation, which is a leading predictor of growth in consumer goods prices.
Despite decreased food prices, a slight rise occurred, according to Patrick Kelly, Chief Director for Price Statistics.