South Africa's producer inflation climbs to 7.6% in January

South Africa’s producer inflation accelerated to 7.6 percent year-on-year in January from 4.8 percent in December, the statistics agency said on Thursday.

On a month-on-month basis, prices at the factory gate were up 1.6 percent, compared with a 0.2 percent rise the previous month, Statistics South Africa said.

The market consensus for January’s Producer Price Inflation was 6.25 percent.

South Africa’s Finance Minister Pravin Gordhan presented an austere budget on Wednesday that was aimed at avoiding credit rating downgrades but it failed to reassure investors and the rand fell more than 3 percent against the dollar while government bond yields soared.

The International Monetary Fund, the World Bank and the Reserve Bank all predict the South African economy will expand by less than 1 percent this year amid a slump in commodity prices, the drought and a slowdown in China, the nation’s biggest export market.