Producer Price Inflation records third consecutive decline since May
The Producer Price Inflation (PPI), determined through the Producer Price Index, has, for the third consecutive time, seen a decline to 8.1% since May 2021.
The PPI measures the average change over time in the prices received by domestic producers for the production of their goods and services.
There was a marginal decline in the PPI for August, as the month recorded a 0.3 percentage point decrease to 8.1%, relative to the 8.4% rate recorded in July 2021.
The implication of the decline in the PPI is that producers are likely to incur less cost on production materials. This is then passed on to the retailers and eventually to the consumer, making the consumer buy at a lesser price.
Although the PPI increased to 11.8% in May 2021 from 11.1% in April 2021, there has been some decline in the months that have come after May.
The month of June recorded a PPI of 10.1 and declined further to 8.4% in June, before a further decline to 8.1% for the month of August, the Ghana Statistical Service has observed.
At a press briefing in Accra on Wednesday, September 15, the Government Statistician, Professor Samuel Annim, noted that the month-on-month change in producer price index between July 2021 and August 2021 was 0.5%.
The producer price inflation in the mining and quarrying sub-sector decreased by 5.4 percentage points over the July 2021 rate of 2.2% to record -3.2% in August 2021.
The producer inflation for the manufacturing sub-sector, which constitutes more than two-thirds of the total industry, increased by 0.8 percentage points to record 12.8%. The utility sub-sector recorded a 0.2% inflation rate for August 2021.
In August 2020, the producer price inflation rate for all industries was 9.0%. The rate increased to 9.7% in September 2020 but declined consistently to a record 7.0% in December 2020.
In March 2021, the rate increased to 13.0%, but in April 2021, it declined to 10.9%. In May 2021, the rate rose to 11.8%, but decreased continuously to 8.1% in August 2021.
In August 2021, four out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 12.8%.
Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 25.3%, while the manufacture of textiles recorded the least inflation rate of 0.3%.
Petroleum price index
The producer inflation rate in the petroleum sub-sector was -5.4% in August 2020. The rate fluctuated between September 2020 (-0.3%) and December 2020 (-4.0%).
Subsequently, the rate increased continuously to pick at 31.0% in March 2021 but declined to 23.9% in June 2021. The rate increased to a record 25.3% in August 2021.
The year-on-year producer inflation for all industry was 8.1% in August 2021; the monthly change rate was 0.5%.
The manufacturing sub-sector recorded the highest year-on-year producer price inflation rate of 12.8%, followed by the utility sub-sector with 0.2%.
The Mining and Quarrying sub-sector recorded the lowest year-on-year producer deflation rate of -3.2%.
The manufacturing sub-sector recorded the highest monthly inflation rate of 0.9%, while the utility sub-sector recorded no change in inflation (0%). The mining and quarrying sub-sectors recorded the least monthly deflation rate of -0.4%.