Following are economists' reaction to PPI data for January.

South Africa's producer price index rose by 9.2 percent year-on-year in January from 11.0 percent y/y in December, Statistics South Africa (Stats SA) data on Thursday showed. This is the fifth consecutive decrease in the producer price inflation headline number.

The PPI dipped -0.7 percent on a monthly basis after December's monthly decrease of -1.1 percent.

The PPI was expected to have increased at 9.5 percent y/y according to a survey of 11 leading economists by I-Net Bridge, with forecasts ranging from just 7.8 percent to 10.8 percent y/y.

Exports were at 2.6 percent y/y from 4.8 percent in December.

Imports were at -5.0 percent y/y from 3.4 percent the month before.

Kgotso Radira, Investec Group:

"Today's outcome is lower than consensus estimate and bodes well for the interest rate outlook. Despite the higher than expected CPI figures released yesterday, the latest PPI figure further supports an early interest rate cut. "We expect both CPIX and PPI inflation to continue on their downward trajectory as inflationary pressures from the exogenous factors (commodity and food prices) continue to ease.

"Policy makers should be more focused on the slowing real economy and potential job losses as inflation in general seems to be on the downward path. We expect interest rates to be lower by around 200bp (if not more) from current levels by year end."

Fanie Joubert, Efficient Group:

"It is lower than the consensus. However, it is still above nine percent, but at least it's back to single digits.

"It shows that the trend in inflation on both the consumer and producer side continues to decelerate.

"The figure is still relatively high and for me it doesn't justify an emergency rate cut, but one in April would be ok."

Chris Hart, Investmemnt Solutions:

"9.2 percent - that's a good result. I think it reinforces that the inflation pipeline is easing rapidly. It does help stability and an interim meeting of the MPC must now be on the table. We now need to see the credit numbers."

Christo Luus, Ecoquant:

"The figure is not surprising and well within expectations. We have seen CPI decline by a similar quantum. What it tells us is that underlying price pressures are easing, which is good news. But at the same time demand is cooling off. Overall the figure is in line with the picture that has been emerging for some time. The trend is in tact to see price increases moderate further."

Dennis Dykes, Nedbank:

"It's fairly encouraging. It has moved solidly into single digit territory and shows that the trend is going to be friendly on both the consumer and producer side.

"It indicates that overall inflation will come down throughout the year."

George Glynos, ETM:

"It is better than expected. Our expectations were for about 10 percent. I think the main reason for it is that imported commodities deflation is more significant than anticipated.'

He said he was "cautious" about predicting an early MPC meeting. "But if consumer inflation continues to decelerate then the Reserve Bank can take a more aggressive approach to easing of interest rates," he said.

I-Net Bridge