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Producer Inflation Drops To 15.8%   
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Declining gold prices pulled down annual producer price inflation to 15.8% in April from a revised rate of 16.2% in March, the Ghana Statistical Service (GSS) said yesterday.

Inflation in the mining and quarrying sub-sector dropped by 7.2 percentage points compared to the March rate -- largely due a decrease in gold prices during the period -- slowing the pace of overall producer inflation in April, said Baah Wadieh, Deputy Government Statistician, at a press briefing in Accra.

Ex-factory prices for all industry increased by 15.8% in April 2012, compared to April 2011, he said.

The fall in producer inflation may not necessarily affect consumer inflation in the same direction, though, given vast differences in the commodity baskets used to compute the underlying indices, the Producer Price Index (PPI) and the Consumer Price Index (CPI).

In April, CPI inflation rose to 9.1% from 8.8% in March -- showing signs that the weak cedi was stoking inflation which had been in single digits since June 2010. The April inflation rate was the highest for a year.

The cedi has weakened against the dollar by 11% this year, according to the average quotation by banks. In the forex bureau market it has depreciated by more than 15% in the same period.

Its decline has triggered an aggressive response by the Bank of Ghana which has upped its policy lending rate by a cumulative 200 basis points since February to 14.5%, fearing the weak currency could stir up inflationary pressure.
Source: Thebftonline.com with additional files from GSS

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