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Business News of Thursday, 28 May 2015

Source: Reuters

Power cuts, weak cedi push Ghana producer inflation in April

Ghana's annual producer price inflation (PPI) rose to 19.5 percent in April from a revised 19.2 percent year-on-year the month before, driven mainly by weakening of the local currency and unstable power supply, the Ghana statistics office said.

The figure, which is high compared with average inflation in the region, is an indication of fiscal challenges facing the West African nation's economy.

Ghana began a three-year aid program worth $918 million with the International Monetary Fund in April to tackle its wide public deficit, growing public debt and high inflation.

Government statistician Philomena Nyarko said producer inflation for the mining and quarrying sector, led by gold prices, rose 4.2 percent to 27.1 percent in April, followed by utilities at 20.7 percent.

"The major drivers of producer inflation in April were the depreciation of the cedi and the lack of constant electric power supply for industries," Nyarko told a news conference in Accra on Wednesday.

Ghana is currently grappling with crippling power cuts which the government has blamed on inadequate generation capacity in past years. The cedi has depreciated around 18 percent since January.

Nyarko said the month-on-month change in PPI between March and April was 2.8 percent.

Producer price inflation is an advance indicator of consumer price inflation, which rose marginally to 16.8 percent April, from 16.6 percent the month before.