South Africa producer inflation slows more than forecast

Annual producer inflation in South Africa has eased to 4.6% in May from a six-month high of 5.1% in April, data by Statistics South Africa showed.

In comparison, market consensus had pointed to a lesser slowdown – to 4.8%.

In May, inflation slowed for non-metallic mineral products (3.6% YoY versus 6.6% YoY in April) and for metals, machinery, equipment and computing equipment (5.5% YoY versus 6.4% YoY in April).

Meanwhile, prices dropped for transport equipment (-0.4% YoY versus 4.4% YoY surge in April).

And, inflation picked up for coke, petroleum, chemical, rubber and plastic products (7.3% YoY versus 6.9% YoY in April) and for foods, beverages and tobacco products (3.8% YoY versus 3.2% YoY in April).

The South African Rand weakened 1.68% on the day against the US Dollar, with the USD/ZAR currency pair last trading at 18.4376.

The Forex pair was trading near fresh two-week highs as market players continued to monitor political developments in South Africa.

Media reports emerged of a major disagreement between the pro-business Democratic Alliance party and President Cyril Ramaphosa over cabinet positions.