Ghana producer price inflation doubles in 2 months

Ghana’s annual producer price inflation rose sharply for a second month in February to 27.1 percent year-on-year from 23.3 percent in January, due mainly to utility price hikes and the depreciation of the cedi currency.  Ghana’s producer price inflation has nearly doubled over the past two months from 15.3 in December.

It is watched as an advance indicator of Ghana’s consumer price inflation, which rose to a fresh three-year high of 14.0 percent in February.  “The utilities sector recorded the largest increase of 55.7 percent, followed by manufacturing at 27.2 percent,” said Philomena Nyarko, government statistician.

She also said that producer prices increased by 2.9 percent month-on-month, marking a slowdown from a 7.2 percent monthly rise in January.  The cedi has depreciated around 12 percent so far this year on strong dollar demand by local firms and trading companies operators for imports.

Ghana has posted rapid economic growth after starting offshore oil production in 2010, but the IMF estimated growth slowed to 5.5 percent last year, below the government’s estimate of 7.4 percent.  With interest rates running high, the government cancelled a $114 million 5-year domestic bond this month and put on hold plans to issue a $1 billion Eurobond.

Copyright The Africa Report 2014