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Business News of Thursday, 28 February 2013

Source: Daily Guide

Producer price inflation reduces

Even though the month-on-month change in producer prices between December 2012 and January 2013 was 0.2 percent, the index increased by 11.5 percent between January 2012 and January 2013 (year-on-year).

This represented a decrease in producer price inflation by 5.6 percentage points relative to the rate recorded in December 2012 of 17.1 percent.

In January 2013, the producer price inflation in the mining and quarrying subsector decreased by 8.4 percentage points over the December 2012 rate of 26.8 percent to record 18.4 percent.

It is not known whether this situation is reflecting in the prices of manufactured products since manufacturing, which constitutes more than two-thirds of total industry, declined to 12.8 percent, from a rate of 19.3 percent in December 2012.

The price of petroleum products was recently increased by Government. This instantly translated into an upward revision of transportation fares across country and its repercussions on all food and non-food products.

The Ghana Statistical Service (GSS), in its latest newsletter, said the rate for the utilities sub-sector was 1.2 percentage point lower than that of December 2012.

During the 12-month period (January 2012 to January 2013), the highest year-on-year inflation of 19.1 percent for all industry was recorded in June and October 2012 while the lowest of 11.5 percent was in January 2013.

“From January to May 2012, the producer inflation fluctuated between 15.0 percent and 16.6 percent, and thereafter increased significantly in July 2012 to 19.0 percent but dropped to 17.8 percent in August 2012.

It declined further in September 2012 by 1.0 percentage point but increased to 19.1 percent in October 2012, dropping subsequently in November 2012 to 15.8 percent. “In December 2012, it increased to 17.1 percent but declined to 11.5 percent in January 2013.”

Offering explanations, the GSS said nine out of 16 major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 12.8 percent.

Manufacture of textiles recorded the highest inflation rate of 34.3 percent while the manufacture of coke, refined petroleum products recorded a negative inflation rate of -0.3 percent.

During the last 12 months, the producer inflation in the petroleum subsector exhibited a downward trend. The highest inflation rate of 20.7 percent was recorded in January and March 2012 and the lowest of -1.3 percent in January 2013.

Monthly changes in the producer price index indicated that mining and quarrying recorded an inflation rate of 0.7 percent while manufacturing recorded a marginal increase of 0.1 percentage points. There was no change in the utilities sub-sector.

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