The year-on-year Producer Price Inflation (PPI) rate for all industry has decline from 9.3 percent in July to 9.0 percent in August 2020. This rate represents a year-on-year decline of 0.3 percentage point in PPI.

The level index has increased from 658.1 in August 2019 to 717.0 in August 2020. This indicates that between August 2019 and August 2020 (year-on-year), the PPI increased by 9.0 percent. This is according to a newsletter released by the Ghana Statistical Service (GSS) on Wednesday September 16, 2020.

In July 2020, the index level was 710.6, this resulted in a month-on-month change in producer price index between July 2020 and August 2020 of 0.9 percent (see Table 1) .

Table 1: Producer Price Index for August 2019 – August 2020

Source: Ghana Statistical Service

The GSS stated that “the producer price inflation in the Mining and Quarrying sub-sector decreased by 0.3 percentage points over the July 2020 rate of 38.2 percent to record 37.9 percent in August 2020. This is the highest year-on-year producer price inflation rate among all the sub-sectors.

“The producer inflation for Manufacturing, which constitutes more than two-thirds of the total industry, decreased by 0.4 percentage points to record 4.0 percent. The utility sub-sector recorded the same inflation rate of 5.8 percent as the rate for July 2020”.

The GSS explained that “the PPI for Ghana, reports the producer price indices with reference to September 2006, the base period”.

According to the office in charge of national statistics, “this release shows the annual (year-on-year) and monthly producer inflation rates for all industry and three major subsectors of industry (Mining and Quarrying, Manufacturing, and Utilities) for the last twelve months”.

The Service however, cautioned that “the figures for August 2020 are provisional and are subject to revision when additional data become available. All other indicators are final”, GSS said.

Trends in PPI

The GSS provided a trend analyses for the PPI over a twelve-month period. According to the Service, “In August 2019, the producer price inflation rate for all industry was 10.2 percent. The rate declined to 8.9 percent in October 2019.

“The rate increased consistently to 14.5 percent in January 2020 but declined to 6.8 percent in March 2020. After that, the rate increased continuously to record 9.5 percent in June 2020 but declined to 9.0 percent in August 2020”.

Manufacturing Sector

The GSS stated that “during August 2020, seven out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 4.0 percent.

“Manufacture of rubber and plastic products recorded the highest inflation rate of 16.5 percent, while the Manufacture of coke, refined petroleum products, and nuclear fuel recorded the least inflation rate of -5.4 percent”(see Fig. 1).

Fig 1 Inflation in major groups in the manufacturing sector

Source: Ghana Statistical Service

Petroleum Price Index

“The producer inflation rate in the petroleum sub-sector was 3.1 percent in August 2019. The rate declined to record -5.7 percent in October 2019.

“After that, the rate increased consistently to record 20.6 percent in January 2020 but declined continuously to record -15.4 percent in May 2020. However, the rate increased to -4.5 percent in June 2020 but declined marginally again to -5.4 percent in August 2020” (Fig 2).

Fig. 2 Petroleum Price Index