Producer price inflation climbs to 16.8% in April

Producer price inflation rate accelerated to 16.8 percent year-over-year in April 2024, according to the latest data from the Ghana Statistical Service.

This marked a notable 1.5 percentage point increase from the 15.3 percent recorded in March 2024. On a month-over-month basis, it rose 4.1 percent between March and April.

The increase in producer inflation was broad-based, impacting major sectors across the economy. In the industry sector excluding construction, producer inflation climbed to 20.2 percent in April, up from 18.8 percent the previous month. This represents a 1.4 percentage point rise in industrial producer prices.

The services sector also saw an acceleration in producer inflation, to 9.4 percent in April from 7.6 percent in March. This 1.8 percentage point monthly increase indicated mounting inflationary pressures faced by service providers.

However, it was the construction sector that recorded the highest producer inflation rate at 50 percent year-over-year in April 2024. While still elevated, this did mark a 6.5 percentage point decrease from the 56.5 percent rate in March. The construction industry continues to grapple with elevated costs for key inputs like cement, steel and timber.

A deeper look into the industry sector shows producer inflation in mining and quarrying remained stubbornly high at an annual rate of 26.4 percent in April. The manufacturing sub-sector saw producer prices rise 3.7 percentage points to 7.6 percent over the same period. Electricity and gas producer inflation decreased slightly to 23.8 percent from 27 percent in March, but remained significantly elevated.

On the other end of the spectrum, the water supply, sewerage and waste management services sub-sector recorded the lowest producer inflation rate in April at 7.5 percent.

Within the services sector, the transport and storage sub-sector experienced producer inflation of 15.1 percent year-over-year in April, up from 12.1 percent in March. This 3-percentage point monthly increase reflected higher costs faced by logistics providers.

The accommodation and food services sub-sector also saw a substantial jump, with producer prices rising 23.5 percent over the past year as of April.

The persistent rise in producer price inflation poses risks for broader inflation to become more entrenched in the economy. As producers face higher costs, they are more likely to pass these increases along to consumers for final goods and services. This could further exacerbate already high consumer price inflation, which is currently at 25 percent.