Producer inflation surges to 7.8% in May as fuel increases take hold

South Africa's factory gate inflation accelerated far more sharply than expected in May as higher fuel costs rippled through the manufacturing sector, raising concerns that businesses and consumers could ultimately bear the burden, according to Business Report.

The latest data from Statistics South Africa (Stats SA), released on Thursday, showed that final manufactured producer price inflation (PPI) climbed to 7.8% year-on-year in May, up from 4.8% in April. Producer prices also increased by 2.6% compared with the previous month.

The stronger-than-anticipated reading largely reflected the impact of elevated oil prices during May, when tensions in the Middle East pushed Brent crude above $100 (R1,647) a barrel.

By Yogashen Pillay

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