July producer inflation dips

The annual producer price inflation (PPI) dipped to 10.6 % in July from 23.1% recorded in June, driven mainly by strong appreciation of the cedi, the Ghana Statistical Service has announced. 

The sharp fall represent a 12.5 percentage point decrease in producer inflation relative to the rate recorded in June 2015.  

“We had declines in all the sub-sectors but the key driver was the strong appreciation of the cedi last month,” said Government Statistician, Philomena Nyarko at a media conference in Accra to announce the monthly producer price index.

She explained that the cedi rallied strongly last month after slumping 25 percent in the first half of the year but has since lost all the gains. Lower gold prices in July also contributed to the fall in the index.

The manufacturing sub-sector recorded the highest year-on-year producer price inflation rate of 13.5%, followed by the utilities sub-sector with 7.3%. The mining and quarrying sub-sector recorded the lowest year-on-year inflation rate of 1.5%. 

From July 2014, the producer price inflation began an upward trend to record 48.6 percent in August 2014. However, the rate consistently declined to 19.2 % in March 2015. 

It inched up to record 19.5 % in April, 2015 and then declined again to 18.8 percent in May 2015. It, however, increased in June 2015 to record 23.1 percent. In July 2015, the rate declined again to 10.6 %.

The monthly changes in the producer price index indicated that manufacturing recorded the highest inflation rate of 3.1 percent, followed by the utilities sub-sector with 0.1%. The mining and quarrying sub-sector recorded the lowest producer inflation rate of -18.3 %.

Manufacturing sector

During the month of July 2015, nine out of the 16 major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 13.5%. 

Manufacture of textiles recorded the highest inflation rate of 49.0 % while the manufacture of motor vehicles, trailers and semi-trailers recorded the lowest producer price inflation rate of -11.9%.

Petroleum price index

The inflation rate in the petroleum sub-sector was 77.3 % in July 2014 and thereafter fluctuated until November, 2014 when it recorded a rate of 61.1 %.

Subsequently, the rate steadily declined to record -8.7 % in March 2015 and -9.6 % in May 2015 as a result of base drift effect and the decrease in ex-refinery prices of petroleum products.

The rate, however, increased in June 2015 to record -0.01 percent as a result of the increase in petroleum prices but decreased to -6.4 % in July 2015.