The Producer Price Inflation rate (PPI) which measures the ex-factory prices of goods and services in the country has declined to 8.1% in August 2021. This rate indicates the year-on-year change in PPI between August 2020 and August 2021. Overall, the Producer Price Index rose to 774.8 in August 2021, from 717.0 in the corresponding month last year.
Moreover, the rate represents a 0.3 percentage point decrease in producer inflation relative to the rate of 8.4% recorded in July 2021. The implication is that, the average prices that domestic producers received for the production of their goods and services have gone down compared to a year ago.
However, the month-on-month change in producer price index between July 2021 and August 2021 was 0.5 percent. This is 0.4 percentage points higher than the 0.1 percent recorded between June and July this year.
Notably, the GSS provided information on inflation rates for the industry and its three major sub-sectors for the last twelve months. The major sub-sectors include Mining and Quarrying, Manufacturing and Utilities.
The producer price inflation in the Mining and Quarrying sub-sector was -3.2 percent. This represents a 5.4 percentage points decrease over the 2.2 percent recorded in July 2021. The utility sub-sector recorded 0.2 percent inflation rate for August 2021.
Manufacturing Sector
The producer inflation for the Manufacturing sub-sector increased by 0.8 percentage points to record 12.8 percent in August 2021. This sub-sector constitutes more than two-thirds of the total industry. In August 2021, four out of the sixteen major groups in the sub-sector recorded inflation rates higher than the sector average of 12.8 percent.
Within the sub-sector, Manufacture of food products and beverages recorded an annual rate of 10.2 percent in August 2021, same as July 2021. However, inflation for Electricity and Water Supply was 0.2 percent in August 2021, as compared to 0.1 percent in July 2021.
Meanwhile, Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 25.3 percent. On the other hand, the Manufacture of textiles recorded the least inflation rate of 0.3 percent.
Petroleum Price Index
Furthermore, the producer inflation rate in the petroleum sub-sector increased to 25.3 percent in August 2021. Meanwhile, August 2020 recorded a lower rate of -5.4 percent. According to the GSS, the rate fluctuated between September 2020 (-0.3%) and December 2020 (-4.0%). Subsequently, it increased continuously to peak at 31.0 percent in March 2021 but declined to 23.9 percent in June 2021.
Trends in PPI
In August 2020, the producer price inflation rate for all industry was 9.0 percent. The rate increased to 9.7 percent in September 2020 but declined consistently to 7.0 percent in December 2020. In March 2021, the rate increased to 13.0 percent, but in April 2021, it declined to 10.9 percent. In May 2021, the rate rose to 11.8 percent but decreased continuously to 8.1 percent in August 2021.
Nevertheless, the Ghana Statistical Service (GSS) warned that the figures for August 2021 are provisional. This means that they are subject to revision when additional data become available. But it noted that all other indicators were final.
