South African producer inflation rose for a third straight month in October after a double-digit jump in gasoline prices, but subsequent declines in fuel costs could ease pressures going forward.
The annual rate jumped to 5.8% in October – the same as a median of seven estimates from economists in a Bloomberg survey – from 5.1% the month before, according to data published Thursday by Pretoria-based Statistics South Africa.
The acceleration in producer inflation, a potential early indicator of consumer goods-price growth, was also driven by a rise in the prices of plastics and rubber, food and drink, metals and machinery, and transport equipment.
Gasoline prices rose 15.4% on the year in October, but that trend has reversed course.
Data from the Central Energy Fund shows the retail cost of 95 octane gasoline could fall by almost R1 a litre from 6 December, and the wholesale diesel price by more than R2 per litre, based on average over-recoveries this month.
South Africa’s central bank last week kept its benchmark interest rate unchanged at 8.25%, a 14-year high, while warning that upside risks to the inflation outlook remain and it remains ready to act to keep price pressures in check.