Producer inflation slowed by 0.1 percent to 2.3 percent in the year to June, Statistics SA data showed on Thursday.

The Production Price Index (PPI) for all commodities for South African consumption was 2.4 percent for the year to May.

"The annual increase of 2.3 percent in the PPI for all commodities for South African consumption is due to annual increases in the indices for locally produced commodities (1.4 percent) and for imported goods (0.9 percent)," Stats SA said.

The lower June rate could be explained by an 11 percent petrol and coal price increase in June to a 23.9 percent increase in May.

This decrease was partially counteracted by increases in the prices of agricultural products from minus 9.1 percent in May to minus 7.7 percent in June and for food at manufacturing which was at minus three percent in May and minus 1.5 percent in June.

Consumer inflation tends to lag the PPI by a couple of months.

From May to June 2005 the PPI for all commodities for South African consumption increased by 1.5 percent.

Sapa

SA economy South Africa is the economic powerhouse of Africa, with a gross domestic product four times that of its southern African neighbours and comprising 25% of the entire continent's GDP.

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