Ghana’s producer price inflation (PPI) fell to 24.4% in March 2025, marking a significant slowdown from the 27.6% recorded in February. This 3.2 percentage point drop, reported by the Ghana Statistical Service (GSS), points to an easing of cost pressures at the producer level, particularly within the mining and industrial sectors.
The month-on-month (MoM) figures tell a similar story. Producer prices rose by 0.6% in March, down from a 1.5% increase in February. These shifts suggest a broader deceleration in input cost increases across Ghana’s economy.
The industrial sector, which excludes construction, recorded the most significant year-on-year decline in inflation. It dropped from 42.9% in February to 36.3% in March. Within this category, mining and quarrying saw a sharp decline to 35.4%, down from 44.6%. However, price pressures remain uneven. While mining support services posted a high inflation rate of 67.3%, the extraction of crude oil and natural gas showed much lower inflation at just 2.5%.
In contrast, the manufacturing sub-sector saw a modest rise in inflation to 22.8% from 20.8%. Some segments of the manufacturing industry recorded inflation rates well above the sector’s average, including basic metals (47.9%), motor vehicles and trailers (35.8%), and leather products (32.5%). This uptick indicates that certain producers continue to face cost increases, possibly due to global raw material price trends or local supply constraints.
Utilities followed a more stable path, with inflation in electricity and gas falling to 5.1%, from 9.7% in February, and water supply, sewerage, and waste management hovering at 4.8%.
The construction sector also recorded relatively modest inflationary pressures, with its year-on-year rate easing to 15.4% from 15.8%. Within the sector, specialized construction activities recorded the highest inflation at 17.9%, while building construction remained the least affected at 14.3%. The gradual slowdown in construction-related inflation may reflect stabilizing input costs for materials such as cement and steel.
In the services sector, inflation slowed slightly to 7.2% from 7.8% the previous month. Still, price pressures remain elevated in specific sub-sectors. Accommodation and food services posted the highest inflation at 22.6%, followed by transport and storage at 20.4%.
On the other end of the spectrum, information and communication recorded a relatively low inflation rate of 4.1%, while telecommunications remained flat at 0.0%. Notably, programming and broadcasting services stood out with the highest inflation in the services category, at 26.3%.
Monthly changes further reinforce the overall cooling trend. Industrial inflation increased by just 0.7% in March, down from 2.1% in February. Month-on-month inflation in services and construction slowed to 0.2% and 0.1%, respectively, compared to 0.6% and 1.0% in the previous month.
What Does This Mean?
The March 2025 PPI figures indicate a broad deceleration of inflation at the producer level. This may provide a welcome relief to both businesses and policymakers, as it suggests easing pressures on production costs, an early signal that consumer inflation could also moderate in the coming months.
For manufacturers, service providers, and construction firms, slower price increases may help stabilize operations, improve planning, and potentially curb the need for aggressive pricing strategies.
From a macroeconomic perspective, this trend may support efforts by the Bank of Ghana to maintain interest rate stability, particularly if consumer price inflation follows suit in the coming months. Lower input costs also bode well for local industries seeking to maintain competitiveness and avoid excessive pass-through of costs to consumers.
However, not all sectors are experiencing relief. Persistently high inflation in sub-sectors like mining support services, basic metals, accommodation, and broadcasting underscores ongoing vulnerabilities in supply chains and sector-specific cost structures. These areas may require targeted interventions to ensure sustained inflation moderation across the board.
Ultimately, while the overall outlook shows signs of cooling, continued monitoring and sector-specific policy responses will be essential to ensure that this downward trend in producer inflation translates into broader economic stability and improved living conditions.
