Domestic PPI inflation picked up from 0.7% y/y in February to 0.9% y/y in March, according to figures of the statistical bureau. The main push came from intermediate goods’ prices, which still reflect the low level of commodity prices last year. Intermediate goods saw their price growth reach a 5-year high, up to 3.0% y/y. This was mitigated by energy prices, which continued to decrease, largely the product of strong state regulation and adjustment of excise taxes. Indeed, the decline has weakened when compared to 2016, but it has continued to have a downward impact on the headline index.
Capital and consumer goods’ prices still contributed to the acceleration of producers’ price growth, however, as capital goods’ prices by 0.8% y/y, a 5.5-year high, while consumer goods’ prices eased their decline to 0.6% y/y, a new 16-month low. Both durable and non-durable goods reported weaker price decline, leaving the upward impact relatively even.
External producers’ prices retained a stable growth at 3.0% y/y in March, with a stronger growth reported by intermediate goods (up 2.9% y/y, faster by 0.5pps m/m), while consumer goods compensated, as their prices rose by 6.4% y/y, slower by 1.4pps m/m. As a result, the combined price index retained a stable growth at 1.9% y/y, with energy prices keeping commodity price growth at bay.