Gold price pushes producer inflation upward

The slight revival in the global gold price has pushed the producer price index upward, as producer inflation in the mining and quarrying subsector increased by 8.9 percentage points over the January 2014 rate of -5.8 percent, jumping to 3.1 percent in February.

Head of Industrial Statistics at the Ghana Statistical Service Anthony Krakah confirmed that the global gold price increase has contributed to the jump in the producer price index.

“This was largely because the world price of gold is gradually increasing, pushing the mining index upwards,” he said.

World gold prices have risen 12.3 percent in 2014, following a 28 percent drop -- the first annual fall for 13 years -- in the metal’s price last year.

Announcing the figures at a media briefing in Accra, Government Statistician Dr. Philomena Nyarko said year-on-year producer price inflation was 27.1 percent in February -- representing an increase of 3.8 percentage points relative to the 23.3 percent rate recorded in January.

Manufacturing inflation, which constitutes more than two-thirds of the producer inflation basket, increased by 3 percentage points to 27.2 percent. The rate for the utilities sub-sector increased marginally to 55.7 percent.

The month-on-month change in producer prices between stood at 2.9 percent.

Dr. Nyarko said during the twelve-month period from February 2013 to February 2014, the highest year-on-year producer inflation of rate 27.1 percent was recorded in February 2014.

“Between April and August 2013, the rate declined continuously over a five-month period to record the lowest rate of 4.7 percent in August 2013, inching up to record 5.8 percent in September 2013,” she said.

She said the PPI has subsequently increased consistently over the last five months to record 27.1 percent in February, the highest in four years.

Five out of the 16 major groups in the manufacturing sub-sector recorded inflation rates higher than the sector’s average of 27.2 percent, while the manufacture of machinery and equipment recorded the highest inflation rate of 76 percent. Producer prices in the manufacture of electrical machinery and apparatus recorded the lowest inflation rate of -0.8% over the one-year period.

The monthly changes in the index indicated that utilities recorded a monthly inflation of 10.2 percent while mining and quarrying recorded 9.4 percent, with the manufacturing sub-sector recording the lowest monthly rate of 5.9 percent.