Producer Price Inflation – December 2025
Producer Price Inflation – December 2025
In December 2025, producer price inflation remained stable at 2.9%, consistent with the figure recorded in October. However, there was a slight month-on-month increase in producer prices, rising by 0.2%. Significant cost increases were noted in the following categories:
- Food and Beverage Production: Increased by 2.9%, contributing 0.9 percentage points to the monthly rise.
- Furniture and Other Manufacturing Production: Rose by 11.9%, adding 0.5 percentage points to the monthly increase.
The previous deflationary trend in producer inflation has ended, with only petrol prices showing a decline of 2.1% year-on-year in December 2025.
Production costs for intermediate goods rose by 10.1% in December, following a 10.7% increase in November. This indicates a clear inflationary trend that requires attention, as these increases exceed the South African Reserve Bank’s (SARB) new inflation target range of 2% to 4%. Annual growth is still significantly influenced by base effects from 2024 data.
In the primary sector, mining costs climbed by 25.7% in December, following a 19.9% rise in November. In contrast, the agriculture sector experienced a further decline of 5.0%, after a 2.4% decrease in November.
Overall, the trend in producer price inflation for final manufactured goods supports positive inflation expectations in South Africa for the short to medium term. Consumer inflation remains low at 3.6% for December, closely aligned with SARB’s target of 3%. While prices for certain intermediate goods—particularly water and electricity—exceed the target range, current figures suggest that consumer inflation is likely to remain low and stable in the near future.
This stability has allowed the Reserve Bank to lower interest rates during the November Monetary Policy Committee (MPC) meeting, as both consumer and producer inflation expectations appear to be well managed at this time. The Bank’s interest rate decision will consider both the Consumer Price Index (CPI) and Producer Price Index (PPI) when analysing inflation expectations for the first quarter of 2026.
