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Producer Inflation Records 2.0%
 
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24-Aug-2017  
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Ex-factory price inflation for July 2017 was 2.0 percent.

Acting Government Statistician, Baah Wadie, who made this known yesterday in Accra, said the rate represents a 1.2 percentage points’ decrease in producer inflation relative to the rate recorded in June 2017 (3.2 percent).

The PPI measures the average change over time in the prices received by domestic producers for the production of their goods and services usually over a period of one year.

According to Mr. Wadie, the month-on-month change in producer price index between June 2017 and July 2017 was -0.2 percent.

Mr. Wadie noted that the mining and quarrying subsector recorded the highest year-on-year producer price inflation rate of 4.1 percent, followed by the manufacturing subsector with 1.8 percent.

The producer price inflation in the mining and quarrying subsector decreased by 7.9 percentage points over the June 2017 rate of 12.0 percent to record 4.1 percent in July, this year, he added.

The utilities subsector recorded the lowest year-on-year producer inflation rate of 1.3 percent, he said.

Mr. Wadie told BUSINESS GUIDE that the huge drop in the PPI rate for the quarrying and mining subsectors over the period under review was due in part to the fall of mineral prices on the world market.

The development has a negative implication for government tax revenue, as a fall in what producers earn from what they produce would lead to a drop in their revenue and in turn a fall in their tax obligation.

Mr. Wadie said during the month of July 2017, the manufacturing sub-sector recorded an average sector year-on-year change of 1.8 percent.

However, eight out of the major 16 manufacturing groups recorded rates higher than the average.

These sectors were machinery 26.1 percent, Motor & Vehicle 15.7 percent, Furniture 12.1 percent, Chemicals 9.0 percent, Wood Processing 8.5 percent, Basic Metals 6.6 percent, Rubber and Plastics 5.6 percent and Textiles 3.5 percent.

Again Paper and Paper Products also recorded the lowest producer price inflation rate in this sub sector of -5.4 percent.

The acting Government Statistician stated that the petroleum price index for July 2017 was -2.7 percent, adding that the petroleum sub-sector in July 2016 recorded a producer inflation rate of -19.3 percent.

Trends

In July 2016, the PPI rate for all industry was 10.4 percent and it increased to 11.1 percent in August of that same year.

However, in September 2016, the rate declined to record 9.7 percent and increased later to 11.9 percent in November of that year, and declined consistently to 3.1 percent in January 2017.

In February 2017, the rate increased to 5.4 percent and then 6.0 percent in March 2017 but declined consistently to record 2.0 percent in July 2017.
 
 
 
Source: Daily Guide
 
 

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