Inflation for June hits 10.1%

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The Producer Price Inflation (PPI) rate for June 2021 was 10.1 per cent, the Ghana Statistical Service has said.

This rate indicates that between June 2020 and June 2021 (year-on-year), the PPI increased by 10.1 per cent. This rate represents a 1.7 percentage point decrease in producer inflation relative to the rate recorded in May 2021 (11.8%).

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The month-on-month change in producer price index between May 2021 and June 2021 was 1.1 per cent.

The producer price inflation in the Mining and Quarrying sub-sector decreased by 3.2 percentage points over the May 2021 rate of 12.7 per cent to a record 9.5 per cent in June 2021.

The producer inflation for the Manufacturing sub-sector, which constitutes more than two-thirds of the total industry, decreased by 1.8 percentage points to a record 12.8 per cent.

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The utility sub-sector recorded no inflation rate for June 2021.

In June 2020, the producer price inflation rate for all industry was 9.5 per cent.

The rate decreased to 9.0 per cent in August 2020.

It increased to 9.7 per cent in September 2020 but declined consistently to a record 7.0 per cent in December 2020.

In March 2021, the rate increased to 13.0 per cent.

However, in April 2021, it declined to 10.9 per cent.

In May 2021, the rate rose to 11.8 per cent but decreased to 10.1 per cent in June 2021.

Meanwhile, according to a Databank Research, Ghana will end the year 2021 with an overall GDP of between 3.9% and 4.9%.

“We expect the increased utilisation of spare production capacity to sustain the recovery in the manufacturing and trade sub-sectors”, the report said, adding: “We, however, view the rising cost of production occasioned by the tax hikes, transport fare hikes, and higher fuel cost as a downside risk to the expansion in manufacturing and trade.”

It noted, however, that the food harvest season in the third quarter of 2021 and the main cocoa season in the fourth quarter of 2021 “should propel agriculture growth in the second half of the year, albeit with some risk from the unfavourable rainfall pattern across the southern sector”.

Ghana’s economy expanded by 3.1% in the first quarter of this year.

It was driven by the following sectors: Construction (14.2%), Manufacturing (6.1%), ICT (22.1%), Livestock (5.5%), Crops and Cocoa (4.9%), Financial and Insurance Services (4.8%) and Transport (3.0%).

“With the trade sub-sector also posting a modest growth of 2.7%, we believe Ghana’s growth pulse is gradually strengthening, albeit with downside risks. The sharp contraction recorded in second-quarter 2020 provides a favourable base effect for a stronger growth print for second-quarter 2021,” Databank Research noted.

Databank Research also noted that contractions in the extractive and hospitality sectors hampered growth for the period.


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