Producer inflation rises to 5.4%

… follows consumer inflation increase

Just a week after an increase consumer price inflation was announced by Ghana Statistical Service recording 9.2 percent in February, the GSS has revealed that producer price inflation for the same month has also increased to 5.4 percent.

This is according to the latest release by the Ghana Statistical Service.

The producer inflation increased to 5.4 percent in February, after it dropped to 3.4 percent in January this year.

The Producer Price Index (PPI) measures the average change over time in the prices received by domestic producers for the production of their goods and services.

The increase recorded for the month indicates that the rate of price increase incurred by retailers on goods purchased at the factory gate accelerated late month compared to the rate of price increase in January.

Explaining the development at a press conference, the Acting Government Statistician, David Kombat said, the sharp increase has been hugely attributed to the depreciation of the Cedi against major trading currencies, as well as the prices of Gold and refined petroleum products on the world market.

The petroleum index shows that the sector increased to 8.9 percent in the month after it had declined consistently to record 3.8 percent in January 2019, from an upward trend to record 36.1 percent in October 2018.

The mining and quarrying industry recorded the highest prices changes, increasing by 4.5 percentage points to 13.4 percent from the 8.9 recorded in January.

This was followed by the manufacturing sector which constitutes two-thirds of the industry. It recorded a 2 percent increase to 5.0 percent.

During the month, five out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 5.0 percent. Manufacture of basic metals recorded the highest inflation rate of 16.1 percent.

However, prices in the utilities sector did not record any increase.

Trends

In February 2018, the producer price inflation rate for all industry was 5.5 percent. The rate decreased to 3.7 percent in March 2018. Subsequently, it increased continuously to record 8.2 percent in July 2018, but declined to 5.8 percent in September 2018. In October 2018, the rate increased to 7.2 percent, but declined continuously to record 3.4 percent in January 2019.

By Joshua W. Amlanu