…but still lags behind consumer price increases
Further evidence that inflationary pressures are intensifying across the Ghanaian economy emerged last week with the revelation that Producer Price Inflation (PPI) for September 2021 was 8.8 percent – up from 8.1 percent in the previous month – according to new data released by the Ghana Statistical Service (GSS)
The producer price index (PPI), published by the GSS is a group of indexes that calculates and represents the average movement in selling prices from domestic production over time. It is a measure of inflation based on input costs to producers.
This rate indicates that between September 2020 and September 2021 (year-on-year), the PPI increased by 8.8 percent.
This rate represents a 0.7 percentage point increase in producer inflation relative to the rate recorded in August 2021 (8.1 percent). The month-on-month change in the producer price index between August 2021 and September 2021 was 0.9 percent.
The latest increases, in lagging behind consumer price inflation indicate that distributors and retailers have again, on average, expanded their margins; consumer price inflation at 10.6 percent for September was faster than producer price inflation indicating that producers demanded lower price increases than intermediate and final sellers of those products. This again shows why entrepreneurs in Ghana tend to prefer commerce to actual manufacturing – the former find it easier to get away with price increases than the latter.
However, economists are already expecting a sharper rise in both the PPI and the CPI for October as the significant increase in transport costs, which themselves derive from rising costs of petroleum products instituted during this month take effect on both producer and consumer prices.
The producer inflation for the Manufacturing sub-sector, which constitutes more than two-thirds of the total industry, increased by 0.2 percentage points to record 13.0 percent. The utility sub-sector recorded 0.1 percent inflation rate for September 2021.
In September 2021, four out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 13.0 percent. Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 27.4 percent – which is even higher than the 25.3 percent recorded in August – while the Publishing, printing and reproduction of recorded media recorded the least inflation rate of 0.0 percent
In September 2020, the producer price inflation rate for all industries was 9.7 percent. The rate declined consistently to a record 7.0 percent in December 2020.
In March 2021, the rate increased to 13.0 percent but declined to 10.9 percent in April 2021. In May 2021, the rate increased to 11.8 percent but decreased continuously to a record 8.1 percent in August 2021. The rate increased to 8.8 percent in September
The producer inflation rate in the petroleum sub-sector was -0.3 percent in September 2020. The rate declined to record -5.0 percent in November 2020.
Subsequently, the rate increased continuously to pick at 31.0 percent in March 2021 but declined to 23.9 percent in June 2021. The rate increased continuously to record 27.4 percent in September 2021.
The year-on-year producer inflation for all industries was 8.8% in September 2021; the monthly change rate was 0.9 percent.
The manufacturing sub-sector recorded the highest year-on-year producer price inflation rate of 13.0 percent, followed by the mining and quarrying sub-sector with 0.5 percent.
The utility sub-sector recorded the lowest year-on-year producer deflation rate of 0.2 percent
The manufacturing and mining and quarrying subsectors recorded the highest monthly inflation rate of 1.1 percent, while the utility sub-sector recorded no change in inflation (0 percent). The PPI for Ghana reports the producer price indices with reference to September 2006, the base period. This release shows the annual (year-on-year) and monthly producer inflation rates for all industry and three major sub-sectors of industry (Mining and Quarrying, Manufacturing and Utilities) for the last twelve months. The figures for the month of September 2021 are provisional, and are subject to revision when additional data become available. All other indicators are final.