The ex-factory prices of goods and services in the country have gone down significantly in the first month of the second half of the year. Figures released by the Ghana Statistical Service (GSS) show that the composite index of producer prices rose from 710.6 in July 2020 to 770.6 in July this year. This resulted in a year-on-year growth of 8.4 percent.
This rate represents a 1.7 percentage point decrease relative to the 10.1 percent recorded in June 2021. This means that average prices received by domestic producers in the country have gone down over the one-year period. Reductions in producer prices in the Mining and Quarrying as well as the manufacturing sub-sector contributed to the overall decline in the PPI last month.
In an efficient price system, this would have reflected in lower prices of locally manufactured goods. However, inflation for locally produced items recorded a massive jump to 9.4% in July from 7.9% recorded in June.
On a month-on-month basis, producer price index between June 2021 and July 2021 was 0.1 percent, lower than 1.1 percent recorded in June.
Sub-sectors of industry
Inflation in the Mining and Quarrying sub-sector decreased by 7.3 percentage points over the rate recorded in June 2021. The sub-sector saw a decline from 9.5 percent in June to record 2.2 percent in July 2021.
Likewise, the producer inflation for the Manufacturing sub-sector decreased by 0.8 percentage points to record 12.0 percent in July 2021. The sub-sector constitutes more than two-thirds of the total value of industry in the country.
However, one of the sub-sectors of industry, the utility sub-sector, recorded a 0.1 percentage point inflation rate for July 2021. Four out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 12.0 percent.
Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 25.2 percent. Recording the least inflation is the Manufacture of electrical machinery and apparatus with a rate of 0.0 percent.
Producer Price Index
The PPI 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.
The GSS noted that it reports on annual (year-on-year) and monthly producer inflation rates for all industry for the last twelve months. It also covers the activities of the three major sub-sectors of industry: Mining and Quarrying, Manufacturing and Utilities.
Nevertheless, the Ghana Statistical Service reminded the public that the figures for the month of July 2021 are provisional. This means that they are subject to revision when additional data become available. However, it noted that all other indicators released are final.
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