Year-on-year inflation from the producers� perspective for August was 17.24%, an increase of 3.30 percentage points relative to the July figure of 13.94 %, the Ghana Statistical Service (GSS) has announced.
The substantial surge was driven mainly by the changes in the mining and quarry sector, which is closely tied with gold-price developments on the world market. The price of gold has gained US$309.50 since September 2010, an increase of 23.7%. This has driven metal prices in the producer basket as miners cash in on windfall earnings. In August 2011, prices gained as much as US$199.
�Mining and quarrying recorded the highest year-on-year rate of 46.93%, representing an increase of 12.75 percentage points over the rate for July 2011 (34.18%). Manufacturing, which constitutes more than two-thirds of total industry, increased to 16.27 percent from a rate of 14.32 percent in July 2011, representing an increase of 1.95 percentage points, with utilities recording the lowest rate of 0.31%.
�Mining and quarrying also recorded the highest monthly change of 11.39%, followed by manufacturing (0.89%), and utilities (0.02),� said Dr. Grace Bediako, Government Statistician, at a media conference in Accra.
It is not clear what has been driving increases in prices of manufactures, but often rising costs push producers to raise the prices of their products. A June survey by the Bank of Ghana revealed business optimism was down compared to two months before. The Bank said its business confidence index dropped to 104.1 in June from 106.6 in April.
Firms surveyed were less optimistic about the level and intensity of their capital expenditures. They also expected lower levels of sales, profits and employment opportunities. Data from the bank also showed the growth of credit to enterprises remained weak compared with trends observed a year earlier, though it�s been witnessing a gradual pick-up. Producer inflation analysis
During the 12-month period (August 2010 to August 2011), producer inflation recorded its highest rate in April 2011 (24.29%). From August 2010 to December 2010, the rate ranged between 15.96 and 18.03 percent. �Mining and quarrying costs, which account for 14 percent of the overall index, rose 47 percent from 34 percent the month before.
�Manufacturing costs, which make up 70 percent of the index, increased 16 percent in August compared with a revised 14 percent the month earlier, while utility costs were unchanged at 0.3 percent,� Bediako said. During the month of August 2011, eight out of the sixteen major groups in the manufacturing sector recorded inflation rates higher than the manufacturing sector average of 16.27 percent.
Manufacture of machinery and equipment recorded the highest inflation rate of 48.44%, while the tanning and dressing of leather and manufacture of hand luggage recorded a negative rate of change of -4.85%. Petroleum Prices
Inflation in the petroleum industry stabilised for the first two months of 2010, but dropped between March and June 2010. The rate again stabilised and then declined in November 2010 after increasing slightly in October 2010. In January 2011, inflation in the petroleum industry rose sharply, but has remained stable since at just under 30%.
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