The Economy Producing a miracle
The Producer Price Index (PPI) jumped to a four-month high of +1.9%, up from +0.5% in June, with prices of food products, beverages and tobacco products at +3.2%, and transport equipment at +8.3%. CPI, as you will recall, was also up, but this does not mean the end of the Reserve Bank’s current cycle of rate cuts, the Government’s best instrument to put some vim into consumer spending, at a time when the Bank expects a reduction in GDP of -7.3%, its worst decline since the Great Depression. And finally, speaking of the Bank, reports of the demise of “Teflon” Tito Mboweni are greatly exaggerated: he is not for the axe, he insists, as the scuttlebutt had it last week.
Comment: Ups and downs, ups and downs.