Ghana’s electricity and gas producer prices rose 13.3% in July from a year earlier, accelerating from 12.5% in June and adding to cost pressures across the economy, according to the Ghana Statistical Service.
The electricity and gas sector also recorded a 2.9% month-on-month increase in producer prices in July, compared with a 0.1% increase in June. The sector’s contribution to overall producer inflation rose to 0.6 percentage point from 0.5 percentage point.
Electric power generation, transmission and distribution accounted for the sector’s 13.3% annual inflation rate, while the manufacture of gas and distribution of gaseous fuels through mains recorded producer inflation of 12.2%.
The increase came as Ghana’s overall producer-price inflation accelerated to 4% in July from 3.5% in June, with producer prices rising 2% during the month.
Industry excluding construction recorded the strongest annual producer inflation among the major sectors at 5.6%, followed by construction at 4.8% and services at 2.5%.
Industrial costs
The electricity and gas increase forms part of a broader rise in industrial producer prices. Industry excluding construction recorded a 4% month-on-month increase in July, compared with a 2.3-percentage-point rise in its annual inflation rate to 5.6%.
Mining and quarrying, which carries the largest weight in the PPI at 43.7%, recorded annual producer inflation of 3.5%, while manufacturing, with a 35% weight, recorded 3.7%.
The data show that producer-price pressures remain concentrated in several industrial activities. Water supply, sewerage and waste management recorded annual inflation of 10.1%, while transportation and storage also recorded 10.1%.
The latest figures provide a measure of the price pressures facing producers, although the PPI tracks prices received by domestic producers and does not by itself indicate the extent to which changes in producer prices are passed through to consumers.
Manufacturing pressures
Within manufacturing, producer inflation was 3.7% in July, but several subsectors recorded substantially higher increases.
Fabricated metal products recorded the highest manufacturing inflation at 25.9%, followed by leather and related products at 17.4%. Food-product manufacturing recorded 8.8%, while pharmaceuticals, medicinal chemicals and botanical products recorded 5.7%.
The increase in energy-related producer prices therefore comes alongside elevated costs in several other industrial activities, contributing to the wider acceleration in producer inflation recorded in July.
Construction producer inflation, meanwhile, eased marginally to 4.8% from 4.9% in June, while services producer inflation remained at a relatively lower 2.5%.
The July data point to a widening divergence between energy and other industrial costs and the comparatively subdued pace of producer-price increases in parts of the services economy.
