Producer Inflation Drops to 26.9%

The Producer Price Inflation (PPI) in Ghana saw a significant decline from 33.0% in October 2024 to 26.9% in November 2024. This drop indicates that, on a year-on-year basis, producer inflation increased by 26.9% between November 2023 and November 2024. This represents a 6.1 percentage point decrease in inflation when compared to the previous month. Additionally, the month-on-month PPI change between October and November 2024 was -1.9%, as reported in a recent release from Accra.

The Producer Price Index (PPI) is a vital indicator used to track the average change in prices received by domestic producers for their goods and services over time. In Ghana, the PPI is based on an index reference period from March 2020 to February 2021. The service producer price inflation in the country stood at 12.5% year-on-year during the period under review, with a monthly change rate of 0.3%.

The accommodation and food services sector recorded the highest year-on-year producer price inflation, which was 32.5%, followed by the transport and storage sector with 31.7%. On the other hand, the information and communication sub-sector recorded the lowest year-on-year producer inflation rate of 8.1%. In terms of month-on-month inflation, the accommodation and food services sub-sector recorded the highest rate at 3.5%, followed by the transport and storage sub-sector at 0.8%. The information and communication sector saw the lowest month-on-month inflation rate, which was 0.2%, in November 2024.

In the service sector, the transport and storage sub-sector saw a slight decrease in inflation, with its rate dropping by 0.1 percentage points from 32.7% in October to 31.7% in November. Meanwhile, the accommodation and food services sub-sector experienced a sharp increase of 2.9 percentage points, from 29.6% in October to 32.5% in November. The inflation rate for the information and communication sub-sector remained relatively low, standing at 8.1% in November 2024.

Within the industrial sector, the mining and quarrying sub-sector recorded a significant reduction in inflation. Its rate decreased by 12.4 percentage points, from 54.3% in October 2024 to 41.9% in November 2024. The manufacturing sub-sector also experienced a decrease, with its inflation rate falling by 3.4 percentage points to 19.3%. The electricity and gas sub-sector recorded an inflation rate of 10.2%, reflecting a slight decrease of 0.4 percentage points from October’s rate of 10.6%. Additionally, the water supply, sewerage, and waste management sub-sector had a producer inflation rate of 5.0%. For the overall industrial sector excluding construction, year-on-year producer inflation stood at 41.3%, with a monthly change rate of -2.0%.

Among the industrial sub-sectors, mining and quarrying recorded the highest year-on-year inflation at 41.9%, followed by manufacturing at 19.3%. The water supply, sewerage, and waste management sector recorded the lowest year-on-year inflation rate of 5.0%. Regarding month-on-month inflation, the manufacturing sub-sector posted the highest rate at 2.5%, while the electricity and gas sub-sector had a negligible change of -0.01%. The mining and quarrying sub-sector saw the lowest month-on-month inflation rate at -6.4%.

In the construction sector, the year-on-year producer inflation was 31.1% in November 2024, with a small monthly change rate of 0.1%. The civil engineering sub-sector had the highest year-on-year inflation rate at 36.8%, followed by the construction of buildings sub-sector at 19.6%. The specialised construction sub-sector recorded the lowest year-on-year inflation rate of 18.3%. For month-on-month inflation, the specialised construction activities sector led with a rate of 1.2%, followed by the construction of buildings sub-sector with 0.2%. The civil engineering sub-sector recorded the lowest month-on-month inflation rate at 0.1%.

Overall, the PPI data highlights a mixed picture of inflation across various sectors in Ghana. While some sectors such as mining and quarrying, and manufacturing experienced notable declines in inflation, others such as accommodation and food services saw sharp increases. The data reflects the ongoing challenges facing various industries, with some sub-sectors facing greater inflationary pressures than others. The overall decrease in producer price inflation from October to November provides some optimism for the economic outlook, although inflationary pressures remain in certain areas, particularly in services and construction.