Ghana’s Producer Price Index (PPI) report for April 2025 revealed a broad easing of inflationary pressures across key economic sectors, with mining and quarrying, manufacturing, and construction leading the slowdown. The data, released by the Ghana Statistical Service (GSS), offers a closer look at how different segments of the economy are reacting to shifting cost dynamics.
Year-on-year, producer inflation stood at 18.5% in April, down significantly from 24.4% in March. This broad-based decline was largely influenced by the performance of the industrial sector, where average prices received by producers fell both annually and monthly.
Industry Takes a Hit as Prices Ease
The Industry, excluding the construction sector, recorded a year-on-year inflation rate of 20.8%, a 6.7 percentage point drop from the previous month. Mining and quarrying, which holds the largest weight in the index at 43.7%, saw inflation fall sharply to 24.3% from 35.4% in March. The contraction was driven by a dramatic drop in the inflation rate for crude oil and natural gas extraction, which fell into negative territory at -12.6%.
The manufacturing sub-sector also experienced a notable cooling, with inflation declining from 22.8% in March to 19.6% in April. While most manufacturing groups recorded moderate changes, the manufacture of basic metals remained elevated at 38.0%, followed by motor vehicles and trailers at 35.8%. At the bottom of the spectrum, refined petroleum products saw deflation of -1.6%.
Electricity and gas inflation remained modest and stable at 5.3%, while the water supply, sewerage, and waste management sector posted a minimal increase of 4.8%.
Construction Sector Moderates
Construction sector inflation dropped to 13.9% in April from 15.4% in March. The largest contributor to this easing was the construction of buildings, which saw a month-on-month decline of 0.9% and a year-on-year rate of 9.7%.
Civil engineering posted an annual inflation rate of 15.7%, supported by utility projects, which peaked at 43.1%. However, inflation in specialised construction activities slowed to 18.0%, with sharp declines seen in building completion and finishing (11.0%) and electrical and plumbing installation (17.8%).
Mixed Signals in the Services Sector
Service sector inflation was relatively subdued at 5.9% year-on-year, down from 7.2% in March. Unlike the industry and construction sectors, services experienced a 0.9% month-on-month increase, led by the information and communication sub-sector, which posted a 1.5% gain in April alone.
Accommodation and food services maintained high inflation at 20.6%, with food and beverage services reaching 21.6%. The transport and storage segment registered a decline to 16.2%, pulled down by easing inflation in land and air transport.
Information and communication services recorded the lowest overall inflation rate at 3.4%, although programming and broadcasting stood out with a high rate of 20.8%.
Implications for the Business Community
The decline in producer inflation is a positive signal for Ghana’s business environment. Lower input costs can translate into more stable consumer prices, improved margins for manufacturers, and greater predictability in budgeting for raw materials and logistics.
For exporters, particularly those in mining and manufacturing, the cooling inflation suggests better competitiveness on the global market. Meanwhile, firms in the services and hospitality sectors may still need to navigate persistent pricing pressures, especially where demand remains high.
