December 2018 has recorded a sharp decline in producer inflation, from 6.5 percent in November to 4.4 percent, representing a decrease of 2.1 percentage points.
This decline has largely come from the drop in the petroleum price index, where after resuming an upward trend to record 36.1 percent in October 2018, the rate declined consistently to record 10.1 percent in December 2018.
The Index measures the average change over time in the prices received by domestic producers for the production of their goods and services, covering three major sub-sectors of industry, namely; Mining and Quarrying, Manufacturing and Utilities.
According to data released by the Ghana Statistical Service (GSS), although mining and quarrying sub-sector recorded a sharp increase by 3.8 percentage points from 4.7 percent to 8.5 percent, it had little impact on the index for the period.
This was mainly due to a counter huge decrease in the manufacturing sub-sector index [which constitutes two-thirds of total industry] from 8.5 percent in November to 4.5 percent, representing 4.0 percentage points decline.
During the month, four out of the sixteen major groups in the sub-sector recorded inflation rates higher than the sector average of 4.5 percent. Manufacture of basic metals recorded the highest inflation rate of 16.4 percent, while conversely, manufacture of machinery and equipment recorded the lowest, at 0.0 percent which means no producer price inflation at all.
The utilities sub-sector recorded the same inflation rate (-0.1) as the rate for November 2018 implying deflation.
In December 2017, the producer price inflation rate for all industry was 8.7 percent. The rate decreased consistently to record 3.7 percent in March 2018. Subsequently, it increased to 8.2 percent in July 2018, but declined to 7.0 percent in August 2018 and further to 5.8 percent in September 2018.
In October 2018, the rate increased to 7.2 percent but declined to 6.5 percent in November 2018.
By Joshua W. Amlanu