The figure which was lower than market expectation follows from the 9.4% year-on-year figure recorded in June. Market consensus was that it would come in at 8.6% year-on-year.
PPI is the price of goods leaving factory gates and mines.
Stats SA said the lower annual rate could be explained by the rate of change in the Producer Price Indices for agriculture, mining and quarrying, food at manufacturing and basic metals among others that have all decreased.
From June 2010 to July 2010 the PPI for domestic output increased by 1.3%.
The monthly increase of 1.3% in the PPI for domestic output was mainly due to monthly contributions from increases in electricity (1.8 percentage points), agriculture (0.1 of a percentage point) and gas and water (0.1 of a percentage point).
Nedbank economist Carmen Altenkirch said: "Higher electricity prices were the main reason behind the 1.3% monthly increase".
The economist said weak global growth and the strength of rand will contain imported-commodity price inflation going forward.
"Price increases for manufactured goods will remain subdued, due to weak domestic and foreign price pressures," Altenkirch said.
The bank expects the Reserve Bank to cut rates when it meets next month due to slowing growth, a strong rand and subdued inflation.
SAnews.gov.za is a South African government news service, published by the Government Communication and Information System (GCIS). SAnews.gov.za (formerly BuaNews) was established to provide quick and easy access to articles and feature stories aimed at keeping the public informed about the implementation of government mandates.
Go to: http://www.sanews.gov.za
