PPI inches up to 13% in March 2021

The Producer Price Inflation (PPI) inched up to 13% in March 2021. This means that the ex-factory prices of goods and services in the country rose by 13% between March 2020 and March 2021.

This rate represents a 2.7 percentage point increase in producer inflation relative to the rate of 10.3% recorded in February 2021. This is according to the Ghana Statistical Service’s (GSS) PPI newsletter for March 2021.

Meanwhile, the month-on-month change in PPI between February 2021 and March 2021 was 0.3%. This is higher than the -0.1% recorded between January 2021 and February 2021 However, it is still lower than the 3.1% recorded between December 2020 and January 2021.

In March 2020, the producer price inflation rate for all industry was 6.8%. The rate increased continuously to record 9.5% in June 2020 but declined to 9.0% in August 2020.

However, the rateincreased to 9.7% in September 2020 but declined consistently to record 7.0% in December 2020. In January 2021, the rate increased to 8.7% and then to 13.0% in March 2021.

PPI by Sector

Moreover, the GSS has provided a breakdown of the PPI for the three major subsectors of the industry: Mining and Quarrying, Manufacturing, and Utilities. The producer price inflation in the Mining and Quarrying sub-sector was 22.7% in March 2021.

This denotes a decrease of 1.5 percentage points over the February 2021 rate of 24.2%. This is also lower than the 27.4% recorded in January 2021.  Also, the utility subsector recorded a year-on-year inflation rate of 0.4%. There was, however, no change in month-on-month inflation between February and March 2021 in the utility sub-sector.

Conversely, the producer inflation for the Manufacturing sub-sector, which constitutes more than two-thirds of the total industry, was 14.0%. This represents an increment of 4.2 percentage points over the previous month. 

In March 2021, 5 out of the 16 major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 14.0%. Manufacture of motor vehicles, trailers, and semitrailers recorded the highest inflation rate of 35.1%.  The Manufacture of electrical machinery and apparatus and Manufacture of machinery and equipment recorded the least inflation rate of 0.0%.

Petroleum Price Index

Furthermore, the PPI in the petroleum subsector was 6.1 percent in March 2020. The rate dropped consistently to record -15.4% in May 2020. In June 2020, the rate increased to -4.5% but declined to record -5.4% in August 2020. Thereafter, it increased to -0.3% in September and declined to -5.0% in November 2020. Subsequently, the rate increased continuously to a record of 31.0% in March 2021. This is over and above 13.7% recorded in February 2021.

Nevertheless, the GSS warned that the figures for March 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.

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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