Ghana’s annual producer price inflation declined for the second month running following a 12-month rising trend, suggesting that the CPI inflation could soften after accelerating for nine consecutive months to reach a 5-year high of 16.9% y/y last month.
The y/y inflation rate dropped to 39.6% in October from a revised 47% in September due to cooling utilities prices, data from Ghana Statistical Service showed. The monthly inflation eased to 0.9% from 1.3%.
Producer prices in the manufacturing sector, which constitutes more than two-thirds of total industry, rose 40.3% y/y last month, ticking up from a 40.1% growth in September. On the other hand, the annual inflation rate in the mining sector decelerated to 48.7% from 50.6% and in the utilities sector it plunged to 27.8% from 76.1% in September.
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.
| Producer price inflation | Oct 2014, y/y | Sept 2014, y/y | Oct 2014, m/m | Sept 2014, m/m |
| Mining and quarrying | 48.7% | 50.6% | -1.1% | 2.1% |
| Manufacturing | 40.3% | 40.1% | 0.9% | 1.2% |
| Utilities | 27.8% | 76.1% | 1.8% | 0.2% |
| All industries | 39.6% | 47.0% | 0.9% | 1.3% |
| Source: Ghana Statistical Service |
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