The Producer Price Inflation (PPI) which measures the ex-factory prices of goods and services in the country inched up to 10.3 percent in February 2021. This means that between February 2020 and February 2021, the PPI increased by 10.3 percent.
This rate represents a 1.6 percentage point increase in producer inflation relative to the rate of 8.7 percent recorded in January 2021. This is according to a newsletter released by the Ghana Statistical Service (GSS) on Wednesday, March 17, 2021.
Month-On-Month Change in PPI
On the other hand, the month-on-month change in the producer price index between January 2021 and February 2021 was -0.1 percent. This is as a result of a decline in the overall index from 747.7 in January 2021 to 747.3 in February 2021. The current rate is lower than the 3.1 percent recorded between December 2020 and January 2021.
Trends
In February 2020, the producer price inflation rate for all industry was 10.5 percent. The rate declined to 6.8 percent in March 2020. The rate increased continuously to record 9.5 percent in June 2020 but declined to 9.0 percent in August 2020.
However, the rate increased to 9.7 percent in September 2020 but declined consistently to record 7.0 percent in December 2020. In January 2021, the rate increased to 8.7 percent and inched up to record 10.3 percent in February 2021.
PPI and Inflation by Sector, February 2021
The Ghana Statistical Service provided a breakdown of the PPI by thethree major subsectors of industry: Mining and Quarrying, Manufacturing and Utilities.The producer price inflation in the Mining and Quarrying sub-sector was 24.2 percent in February 2021. This denotes a decreased by 3.2 percentage points over the January 2021 rate of 27.4 percent. The utility subsector recorded a year-on-year inflation rate of 0.4 percent. There was however, no change in month-on-month inflation between January and February 2021 in the utility sub-sector.
Manufacturing Sector
Conversely, the producer inflation for the Manufacturing subsector, which constitutes more than two-thirds of the total industry, was 9.8 percent. This represents an increment of 2.9 percentage points over the previous month. In February 2021, seven out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 9.8 percent. Manufacture of motor vehicles, trailers, and semi-trailers recorded the highest inflation rate of 40.6 percent. The Manufacture of machinery and equipment recorded the least inflation rate of 0.0 percent.
Petroleum Price Index
The producer inflation rate in the petroleum subsector was 6.1 percent in February 2020. The rate declined consistently to record 15.4 percent in May 2020. In June 2020, the rate increased to -4.5 percent but declined to record -5.4 percent in August 2020. Thereafter, it increased to -3.0 percent in September and declined to -5.0 percent in November 2020. The rate increased continuously to a record of 13.7 percent in February 2021.
The GSS however, warned that the figures for February 2021 are provisional and are subject to revision. That means the GSS may revise the figures when additional data become available. But, all other indicators are final.
About the Producer Price Index
The Producer Price Index measures the average change over time in the prices received by domestic producers for the production of their goods and services. The PPI for Ghana reports the producer price indices with reference to September 2006, the base period. This release shows the annual and monthly producer inflation rates for all industry. It also captures the three major subsectors of industry (Mining and Quarrying, Manufacturing and Utilities) for the last twelve months.
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