Producer price inflation records second consecutive decline since May

The input costs incurred by producers on raw materials for the production of goods and services have seen another decline to 8.4% in July, the Ghana Statistical Service (GSS) has observed through the producer price index (PPI).

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

This is the second consecutive time that the producer price inflation has witnessed a decline since it last recorded a rise to 11.8% in May 2021 from 11.1% in April 2021.

The decline in the PPI for July marks a 1.7 percentage points decrease compared to the 10.1% PPI recorded for June 2021.

The recorded 10.1% PPI for June followed a decline in the rate by 1.7 percentage points from the May figure of 11.8%.

The Government Statistician, Professor Samuel Annim, at a press briefing in Accra on Wednesday, August 18, said the month-on-month change in the PPI between June 2021 and July 2021 was 0.1%.

Providing details on major sectorial industry PPI, the head of the statistical service, Prof Annim, stated that all three sub-sectors, manufacturing, mining and quarrying, and utilities recorded declines on a y-o-y basis.

The producer price inflation in the Mining and Quarrying sub-sector decreased by 7.3 percentage points over the June 2021 rate of 9.5% to record 2.2% in July 2021.

The producer inflation for the Manufacturing sub-sector, which constituted more than two-thirds of the total industry, decreased by 0.8 percentage points to record 12%.

PPI for the utility sub-sector recorded a 0.1 per cent inflation rate for July 2021.

Manufacturing Sector

In July 2021, four out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 12%.

Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 25.2%, while the Manufacture of electrical machinery and apparatus n.e.c. recorded the least inflation rate of 0.0 %.

Petroleum Price Index                                                              

The producer inflation rate in the petroleum sub-sector was -4.0% in July 2020. The rate fluctuated between August 2020 (-5.4%) and November 2020 (-5.0%).

Subsequently, the rate increased continuously to pick at 31% in March 2021 but declined to 23.9% in June 2021. The rate increased to a record 25.2% in July 2021.

READ ALSO: Producer Price Inflation For June 2021 Is 10.1 Percent

Trends

Data provided by GSS showed that in July 2020, the PPI rate for all industries was 9.3%. The rate decreased to 9% in August 2020. It increased to 9.7% in September 2020 but declined consistently to record 7.0% in December 2020.

In March 2021, the rate increased to 13%. However, in April 2021, it declined to 10.9%. In May 2021, the rate rose to 11.8 percent but decreased to 8.4 percent in July 2021.