Year-on-year producer price inflation (PPI) eased to 7.3 percent in February from 9.2 percent in January, Statistics South Africa said on Thursday.

The PPI for domestic output showed an annual rate of change of 7.3 percent at February 2009. This rate was 1.9 percentage points lower than the corresponding annual rate of 9.2 percent at January 2009, the agency said.

From January 2009 to February 2009, the PPI for domestic output decreased by 0.3 percent.

The PPI for imported commodities decreased by 2.9 percent.

Economists react to the PPI data:

Fanie Joubert, Efficient:

"It's lower than expected. But some of the major items like basic metals and chemical products - responsible for the slower rise - are not related to the consumer basket.

"However, overall, the continued deceleration trend is still positive."

Mike Schussler, Economists.co.za:

"This is very good news. It is absolutely good news after the disappointing CPI figure earlier this week. I suspect that it is mostly due to collapsing commodity prices. PPI's downward trend is driven by lower commodity prices while CPI is driven higher by services fees. We see CPI staying high because of the hikes we are seeing in service costs such as doctors' fees and medical aid costs, while the PPI is only expected to move up when Eskom's new tariffs feed through."

Dennis Dykes, Nedbank:

"Well, it did come in a little bit below the consensus and probably offsetting some of the bad news from yesterday's CPI.

"But, overall, producer inflation will continue to come down over the next few months."

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