South Africa's producer price index rose by 5.3 percent year-on-year in March from 7.3 percent y/y in February, Statistics South Africa data on Thursday showed. This is the seventh consecutive decrease in the producer price inflation headline number.

The PPI increased 0.1 percent on a monthly basis after February's monthly decrease of -0.3 percent.

The PPI was expected to have increased at 5.5 percent y/y according to a survey of leading economists by I-Net Bridge, with forecasts ranging from just 5.2 percent to 6.3 percent y/y. PPI was at 11.9 percent a year ago.

Economists react to the PPI data:

Chris Hart, Investment Solutions:

"This is a very good number. The inflation picture that is emerging is a lot better than what the CPI number yesterday suggests.

"The PPI number and the better credit extension numbers will give the SARB the confidence to comfortably cut rates by 100bp today.

"Although the CPI inflation number is high, the risks around inflation are receding quite significantly. The firmer rand is also helping and that will help support another rate cut in May."

Annabel Bishop, Investec:

"PPI inflation came out lower than expected, but March is a very low survey month. We continue to believe the SARB will cut interest rates by 100bp today, and the better-than-expected PPI figure (as agricultural food prices fell once again on the month and on the year) should give them additional ammunition to do so.

"Indications are that the SA economy will remain in recession this year, supported by recent data, including the liquidation statistics and January's leading indicator. PPI deflation is likely to be recorded from May and we believe there is a growing possibility of a 100bp cut in interest rates in either May or June rather than the currently expected 50bp easings in those months."

Doret Els, Efficient Group:

"We were expecting a figure of 5.2 and the figure has come in as 5.3. What it shows is that there has been a significant slowdown since February. The slowdown in commodity prices is coming through in the PPI figure. What is also a positive development is that food and alcohol products have also slowed down."

I-Net Bridge

Find your dream home In the market for a new home? Browse our massive database for the perfect property...

Walls: who's responsible? Who's responsible for the upkeep of walls dividing exclusive use gardens?

E Cape hamlet booming Some estate agents in this E Cape town are reporting their highest sales in the past few years.