Ghana’s annual producer price inflation decelerated for the fifth consecutive month in January, reaching a 12-month low of 23.5%, sharply down from 34.2% in December, provisional data from Ghana Statistical Service showed. The data suggests subsiding pressures on the country’s worryingly high consumer price inflation, which eased for the first time in 12 months in January, reaching 16.4%.

Producer prices in the manufacturing sector, which constitutes more than two-thirds of total industry, rose 22.6% y/y last month, easing from a 33.1% growth in December, as inflation in the petroleum sub-sector plunged to 4.3% in from 30.9% in December.

The annual inflation rate in the mining sector cooled to 36.4% from 43.3% and that in the utilities sector slowed to 15.8% from 27.5%.

Ghana’s monthly PPI deflation deepened to 1.4% in January from 1.0% in December.

The West African economy, which is heavily reliant on exports of gold, oil and cocoa, was hit by a significant loss of investor confidence as a result of a combination of weak governance and domestic energy challenges coupled with subdued global commodity prices. This resulted in a hefty depreciation of the local cedi currency, surging inflation, and a slowdown in economic growth. The government is now in talks with the IMF on a financial assistance programme that should restore macroeconomic stability and win back the confidence of private investors.