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Producer price inflation rate falls to 9.3% in July

The Ghana Statistical Service says the PPI began a steady climb in April 2020 at 7.4 % and increased consistently to 9.5% in June 2020

Ghana News Agency (Accra) – The producer price inflation (PPI) rate fell slightly in July to 9.3% compared with a revised 9.5% recorded in June.

The month-on-month change in producer price index between June 2020 and July 2020 was 1.7%.

This is the first time that the PPI has fallen marginally since the novel coronavirus was reported in Ghana in March.

In a statement, the Ghana Statistical Service (GSS) said the marginal decrease in the all-industry inflation rate from 9.5% in June 2020 to 9.3% in July 2020 was as a result of the decline in inflation rate in the utilities subsector.

Anthony Kraka, head of industry statistics at the GSS, said: “Inflation for domestic producers began the year 2020 at 14.5%, dropping to 10.5% in February and dropping further to 6.8% in March. The PPI began a study climb in April 2020, recording a rate of 7.4 % and increasing consistently to 9.5% in June, before reducing marginally in July to 9.3%.”

The mining and quarrying subsector recorded the highest year-on-year producer price inflation rate of 38.2%, followed by the utilities subsector with 5.8%.

The GSS said the decrease in the utilities subsector inflation rate from 12% in June 2020 to 5.8% in July 2020 was the result of a base drift effect. The base effect is the distortion in a monthly inflation figure that results from abnormally high or low levels of inflation in the year. A base effect can make it difficult to assess inflation levels accurately over time.

“The base drift is as a result of increases in electricity prices by 11.2% and water by 8% on 1 July 2019,” the statement said.

Zero inflation

Manufacturing recorded the lowest year-on-year producer inflation rate: 4.4%.

For monthly changes, the mining and quarrying subsector recorded the highest rate of 7.2%, followed by manufacturing with 0.8%.

The utilities subsector recorded no inflation in July 2020.

The Producer Price Index (PPI) measures the average change over time in the prices received by domestic producers for production of their goods and services.

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Source
Ghana News Agency
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