Producer Inflation declines to 6.8 percent in March

Producer inflation for March 2020 has declined for the second consecutive month to 6.8 percent, from 11.8 percent recorded in February, 2020, according to data released by the Ghana Statistical Service (GSS).

This represents a 3.7 percentage point decrease in producer inflation relative to the rate recorded in February 2020.

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

From the data, the decline emanated largely from the manufacturing sector, which constitutes more than two-thirds of the total industry, as well as the mining and quarrying sector.

The manufacturing sector decreased by 4.7 percentage points to record 2.1 percent, while the Mining and Quarrying sub-sector decreased by 2.4 percentage points from the February 2020 rate of 26.1 percent to record 23.7 percent in March 2020.

The utility sub-sector recorded an inflation rate of 12.1 percent for March 2020 indicating a decrease of 0.1 percentage point from the February 2020 rate of 12.3 percent.

Manufacturing

During March 2020, ten out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 2.1 percent. Manufacture of machinery and equipment recorded the highest inflation rate of 24.7 percent, while the Manufacture of coke, refined petroleum products and nuclear fuel recorded a deflation rate of -9.6 percent

The producer inflation rate in the petroleum subsector was 13.0 percent in March 2019. In April 2019, the rate increased to record 17.2 percent but declined to 1.2 percent in June 2019. However, it increased to 3.1 percent in August 2019 but declined again to -5.7 percent in October 2019. Thereafter the rate increased consistently to record 20.6 percent in January 2020, since then, the rate has declined consistently to record -9.6 percent in March 2020.

Trends

In March 2019, the producer price inflation rate for all industry was 7.1 percent. In April 2019, the rate remained unchanged but declined to 6.7 percent in May 2019. Since then, the rate increased consistently to record 10.2 percent in August 2019 but declined to 8.9 percent in October 2019. The rate increased again continuously to record 14.5 percent in January 2020 but declined to record 6.8 percent in March 2020.