South Africa's producer price index (PPI) rose by 9.1 percent year-on-year in November from a 9.5 percent year-on-year (y/y) increase in October, Statistics South Africa (Stats SA) data on Thursday showed.

The PPI rose 0.3 percent on a monthly basis after October's monthly increase of 1.1 percent.

PPI was expected at 9.6 percent y/y, a survey of 13 economists by I-Net Bridge has found.

Following are leading economists' reactions to the PPI data:

RIDLE MARKUS, economist at Absa Bank:

"The number is a nice surprise, as it came in quite a bit lower than expected. However, I don't think that it would have a major impact on next year's interest rate decision, as PPI inflation is likely to rise again towards the year end and in early 2008.

"While we do not expect another interest rate hike at the end of January, given the continuous inflationary pressure, it could be a close call."

KAY MULLER, economist at RMB:

"It is very good news. It shows that inflationary pressures are showing signs of easing, and endorse our view that interest rates will be left on hold in January."

FANIE JOUBERT, economist at Efficient Group:

"The PPI figures are better than expected, which is a positive development. Another positive development is that the gap between CPI and PPI seems to be closing. The imported component is low, but if the rand weakens it would go back again.

"We should not make too much of month-on-month figures, but if the trend continues it is positive. However with CPI close to eight percent it would be difficult for the Reserve Bank not to hike rates again next year."

ANNABEL BISHOP, e conomist at Investec Group:

"PPI inflation came out lower than expected. However, PPI inflation is still very high, well above the 6.0 percent upper limit of the inflation target, and is exerting upward pressure on CPIX. With CPIX inflation likely to peak close to 9.0 percent early next year, there is a growing risk of a further 50 basis point hike in interest rates (at the January MPC meeting).

I-Net Bridge