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Business News of Thursday, 31 March 2016

Source: Graphic.com.gh

PPI on ex-factory prices of goods, services drops

The Producer Price Inflation (PPI) for ex-factory prices of goods and services has dropped from 16.9 per cent in January 2016 to 14.5 per cent for the month of February.

The reduction represents a decrease of 2.4 per cent over the period under review.

However, there was no change in producer price index between the months of January and February 2016.

At a news conference in Accra, the Government Statistician, Dr Philomena Nyarko, said the mining and quarrying sub-sectors recorded the highest monthly change rate of 7.8 per cent, followed by the manufacturing sub-sector with the lowest inflation rate of -7.9 per cent.

Manufacturing, which constitutes more than two-thirds of total industry, decreased by 2.3 percentage points to record 9.8 per cent.

Dr Nyarkoh indicated that the utilities sub-sector recorded an inflation rate of 43.9 per cent in February 2016, indicating a decrease of 12.7 percentage points over the January 2015 rate of 56.6 per cent.

The Producer Price Inflation for the mining and quarrying sub-sectors for the month under review stood at 8.6 per cent, representing a 5.7 per cent increase over the January 2016 rate of 2.9 per cent.

Trends

The year-on-year inflation in ex-factory prices of goods and services stood at 14.5 per cent in February 2016.
From February 2015, the producer price inflation rate consistently declined to record 19.2 per cent in March 2015. Subsequently, the rate fluctuated to record 23.1 per cent in June 2015.

The rate declined consistently from 10.2 per cent in July 2015 to 2.9 per cent in October 2015. However, it increased to record 11.0 per cent in December 2015.
In January 2016, the rate increased to record 16.3 per cent but declined in February 2016 to record 14.5 per cent.

Petroleum trends

Inflation rate in the petroleum sub-sector was -0.5 per cent in February 2015. Subsequently, the rate consistently declined to record -9.6 per cent in May 2015 due to base drift effect and decrease in ex-refinery prices of petroleum products.

In August 2015, it further declined to -28.0 per cent, and then to -34.5 per cent in October 2015 as a result of decreases in the prices of petroleum products.

It, however, increased to -21.8 per cent in December 2015 and rose further to record 3.3 per cent in January 2016. It then declined to 0.5 per cent in February 2016 as a result of decreases in the prices of petroleum products.