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June producer inflation surges to 23.1 per cent

Aug. 3, 2015, 11:26 a.m.

The annual producer price inflation rose sharply to 23.1 percent in June 2015, representing an increase in producer inflation of 4.3 percentage points higher than the 18.8 recorded in May 2015.

The ex-factory prices of the mining and quarry industry recorded the highest year-on-year producer inflation rate of 30.0 percent,being the major contributor to the index’s surge during the year under review.

The producer price inflation in the mining and quarrying sub-sector increased by 4.6 percentage points over the May 2015 rate of 25.4 percent, to record 30.0 percent in June 2015.

Manufacturing, which comprises more than two-thirds of total industry, increased by 5.2 percentage points to 21.9 percent. The utilities sub-sector recorded an inflation rate of 20.8 percent in June 2015, indicating a marginal increase of 0.2 percentage point over the May 2015 rate of 20.6 percent.

Government Statistician Dr. Philomena Nyarko, speaking at a media briefing in Accra to announce the latest figures, explained that the significant rise in the price index was influenced by changes in the extractive and manufacturing sectors.

“The depreciation of the cedi in June was a key factor in relation to the price of gold, which is a key component of the mining and quarrying subsector. There were also increases in the price of cement and textiles,” she said.

Dr. Nyarko stated that the producer inflation for manufacturing which includes petroleum refining rose most, by 5.2 percentage points to 21.9 percent while the mining and quarrying sub-sector which recorded 30.0 percent was driven by gold prices. Producer inflation for utilities edged up 0.2 percentage points to 20.8 percent.

With respect to the monthly changes, the manufacturing sub-sector recorded the highest inflation rate of 5.3 percent, followed by the mining and quarrying sub-sector with 4.4 percent. The utilities sub-sector recorded the lowest rate of 0.4 percent.”
From June 2014, the producer price inflation began an upward trend and increased consistently over three months to record 48.6 percent in August 2014.

However, the rate consistently declined to record 19.2 percent in March 2015. It inched up to record 19.5 percent in April 2015 and then declined to 18.8 percent in May 2015. It however increased again in June 2015 to record 23.1 percent.

Sector Trends 
Manufacturing sector: During the month of June 2015, 10 out of the 16 major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 21.9 percent.
Manufacture of rubber and plastic products recorded the highest inflation rate of 58.7 percent, while the manufacture of coke and refined petroleum products recorded the lowest producer price inflation rate.

Regarding the petroleum price index, the inflation rate in the petroleum sub-sector was 44.7 percent in June 2014. It reached a peak of 77.3 percent in July 2014 and thereafter fluctuated until November 2014, when it recorded a rate of 61.1 percent.
Subsequently, the rate steadily declined to record -8.7 percent in March 2015 and -9.6 percent in May 2015 as a result of base drift effect and the decrease in ex-refinery prices of petroleum products. The rate however increased in June 2015 to record -0.01 percent as a result of the increase in petroleum prices.

Source: B&FT

Disclaimer : The views expressed in this news report do not necessarily reflect those of the National Development Planning Commission