Ghana’s Producer Price Inflation Eases Slightly to 26.1% in December 2024

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Inflation
Inflation

Ghana’s producer price inflation (PPI) showed a slight decline in December 2024, dropping to 26.1 percent year-on-year from 27.0 percent the previous month, according to the latest data from the Ghana Statistical Service.

This reduction of 0.9 percentage points offers a glimmer of relief as the country continues to grapple with inflationary pressures across its production sectors. On a month-on-month basis, PPI fell by 1.4 percent between November and December, signaling a slight easing in the overall inflationary trend.

The PPI is a key metric for understanding price changes within the country’s production sectors, reflecting the average prices domestic producers receive for their goods and services. The decrease suggests that while inflation remains high, there are signs that the pressure on producers may be beginning to moderate.

Industry-wide, the numbers tell a complex story. The industrial sector, excluding construction, experienced a reduction in inflation, which fell from 41.4 percent in November to 40.2 percent in December. While this still reflects significant price increases, it points to some stabilization in the overall economy. In the construction sector, inflation also dropped slightly, moving from 30.4 percent to 29.6 percent in December.

The services sector, which has faced less acute inflation, recorded the lowest year-on-year increase, at 6.8 percent in December 2024. However, within this sector, inflation was far from uniform. The accommodation and food services sub-sector, which has been under pressure from rising costs, saw the highest inflation rate at 30.5 percent, followed closely by transport and storage at 23.1 percent.

Meanwhile, mining and quarrying experienced the highest inflation within the industrial sector, clocking in at 42.8 percent in December, closely followed by accommodation and food services at 30.5 percent. These figures suggest that certain sectors are still experiencing heavy inflationary burdens, which could limit their ability to invest or expand in the current economic climate. Notably, the water supply, sewerage, and waste management sector stood out for its relatively stable inflation, recording the lowest figure across all sectors at 5.0 percent year-on-year.

The electricity and gas sub-sector also showed signs of easing inflationary pressure, with a decline from 10.4 percent in November to 8.1 percent in December, indicating some relief for energy producers in the country. On a month-to-month basis, mining and quarrying saw the largest drop in inflation at -2.3 percent, suggesting some deflationary trends within that industry.

For the construction sector, which is traditionally a major pillar of Ghana’s economy, the situation remained difficult, although the inflation rate did decline from 30.4 percent to 29.6 percent. The civil engineering sub-sector continued to experience the highest inflation at 36.1 percent, while the buildings sub-sector showed the lowest inflation at 15.3 percent. This data highlights that different segments of the construction industry are being affected differently by the broader economic environment.

The services sector also reflects these mixed trends, with accommodation and food services seeing the steepest rise in producer prices, while information and communication recorded a modest 2.9 percent increase. The transport and storage sub-sector, on the other hand, showed the highest month-on-month drop at -6.0 percent, underscoring the volatility faced by these industries in a high-inflation environment.

Despite the slight dip in producer inflation, these figures still point to a complex economic landscape for Ghana. While there has been some easing in certain sectors, inflation in key industries like mining, accommodation, and construction remains stubbornly high. As these sectors are crucial drivers of growth and employment, addressing the underlying causes of inflation and finding solutions to stabilize prices will be essential for Ghana to maintain sustainable economic development in 2025.

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