Producer price inflation rises to 33.5%

Producer Price Inflation rate went up by 2.3 percentage points to record 33.5 percent in the fifth month of the year, up from 31.2 percent recorded in April 2022.

The current rate is an indication of the increase in ex-factory prices of goods and services between May 2021 and May 2022 (year-on-year).

The Producer Price Index (PPI) which measures the average change over time in the prices received by domestic producers for the production of their goods and services, rose from 981.3 in April 2022 to 1016.7 in May 2022.

This resulted in a month-on-month change of 3.6 percent in the producer price index between April and May 2022. This was higher than the rate of 1.3 percent recorded between March and April this year.  It is however, lower when compared to the monthly producer inflation rates recorded between February 2022 and March 2022 (6.8%) and that of between January and February 2022 (3.9%).

PPI for the various sub-sectors

The Ghana Statistical Service (GSS) provided information on inflation rates for all industry and its three major sub-sectors for the last twelve months. The major sub-sectors include Mining and Quarrying, Manufacturing and Utilities.

Data from the GSS showed that the producer price inflation in the Mining and Quarrying sub-sector decreased by 11.3 percentage points to 23.9 percent in May 2022 as compared to the rate of 35.2 percent reported in April 2022. This shows that inflation within the sub-sector continued to fall in the last two months as against the 33.6 percent recorded in March 2022.

Meanwhile, inflation in the utility sub-sector remained unchanged at 1.1percent in May 2022, same as the rate recorded in April 2022.

Manufacturing Sector

The producer inflation for the Manufacturing sub-sector, which constitutes more than two-thirds of the total industry, increased by 6.1 percentage points to 45.0 percent in May. The month-on-month inflation in the manufacturing sub-sector was 6.4 percent in May 2022.

In May 2022, one out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 45.0 percent. Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 121.0 percent, while the Manufacture of machinery and equipment recorded the least inflation rate of 0.0 percent.

Trends in Producer Inflation

In May 2021, the producer price inflation rate for all industry was 11.8 percent. The rate decreased continuously to record 8.1 percent in August 2021 but increased to record 8.8 percent in September 2021. Subsequently, the rate resumed an upward trend and increased consistently to record 33.5 percent in May 2022.

Petroleum Price Index

Meanwhile, the petroleum sub-sector recorded a 29.4 percent producer inflation rate in May 2021. The rate decreased to 23.9 percent in June 2021 and increased to 25.3 percent in August 2021.

Thereafter, it increased continuously to 58.4 percent in November 2021 but dropped to 36.0 percent in January 2022. In February 2022, the rate increased to 44.3 percent before rising further to settle at 121.0 percent in May 2022.