Ghana’s Producer Price Index (PPI) for July 2017 has dropped to two percent, representing a change of 1.2 percentage points from the 3.2 percent recorded in June.
The PPI measures the average change over time in the prices received by domestic producers for the production of their goods and services.
Acting Government Statistician, Baah Wadieh, attributed the drop to base drift effect and stability in exchange rate that pushed down the price of gold by about two percent in July.
“The decline is basically due to some form of stability in the exchange rate which is stabilising most of the returns that we see from the export of the mining and quarrying subsector, particularly gold.
We recorded the big drop in the mining and quarrying subsector because of two significant changes that took place. First, there was the base drift effect and second, the prices of gold in the world market declined by about two percent. And these two factors resulted in the decline in inflation that we observed in the mining and quarrying subsector,” he said.
The PPI release shows the annual and monthly producer inflation rates for all three major subsectors of industry, namely: mining and quarrying, manufacturing, and utilities.
The figures show that the producer price inflation rate in the mining and quarrying subsector decreased by 7.9 percentage points over the June 2017 rate of 12 percent to record 4.1 percent in July 2017.
The manufacturing subsector, which constitutes more than two-thirds of total industry, recorded 1.8 percent, whilst the utilities subsector recorded 1.3 percent, same figures recorded for the two subsectors respectively in June.
Half of the sixteen subsectors in the manufacturing subsector recorded inflation rates higher than the sector’s average of 1.8 percent.
Manufacture of machinery and equipment recorded the highest inflation rate of 26.1 percent, while manufacturing of paper and paper products recorded the lowest producer price inflation of rate of -5 .4 percent.
In the petroleum subsector, the rate increased slightly from -4 percent in June to -2.7 percent in July 2017.
The July drop indicates that consistently since March, the PPI has always declined.