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Utility prices increases affect Producer Price Inflation



By Fred Yaw Sarpong

The increase of utility prices by Public Utilities and Regulatory Commission (PURC) last month affected the Producer Price Inflation (PPI) for September, 2013. Electricity and water tariff increase pushes PPI to 5.4% in September, 2013 from 4.7% recorded in August 2012.

According to Ghana Statistical Service (GSS) year-on-year producer inflation went up by 0.7 percentage points relative to the rate recorded in August 2013, which was 5.4%.

This means that, ex-factory prices of goods for all industry increased on average by 5.4% in September 2013 relative to the price level recorded in September 2012.
The month-on month change in producer prices between August 2013 and September 2013 was 1.9%. This also means that compared to August 2013, the PPI increased by 1.9% in September 2013.

The Chief Technical Director, Anthony Amusu announced this to the media at a news conference in Accra last week.

He stated that the producer inflation for mining and quarrying subsector increased by 2.8 percentage points over the August 2013 rate of negative 14.1%, to record negative 16.9%.

The manufacturing sector, which constitutes more than two-thirds of total industry, increased from 10.8% in August to 12.6% in September, 2013. The rate for the utilities sub-sector was the same as that recorded for August 2013, which was 0.2%.

Seven major groups in manufacturing recorded inflation rates higher than the sector average (12.6%) in September 2013. The items include manufacture of machinery and equipment, which recorded the highest inflation rate of 76.0%, while producer prices in the manufacture of electrical machinery and apparatus recorded the lowest inflation rate of -5.6% over the one year period.

Between September 2012 and December 2012, the inflation rate in the petroleum sub-sector remained relatively stable. However, it dropped in January 2013 and subsequently rose in March 2013.

The rate remained unchanged in April and May 2013. It thereafter increased steadily to record 19.3% in June 2103. In July 2013, the rate declined to 18.5% due to slight declines in the prices of marine gas oil and aviation fuel. However, the rate increased to 33.6% in September 2013 as a result of increases in the prices of petroleum products.

During the 13-month period (September 2012 to Septemebr 2013), the highest year-on-year inflation of 19.1% for all industry was recorded in October 2012 and the lowest in August 2013 (4.7%). Within the last quarter of 2012, the producer price inflation fluctuated until December 2012 when it started declining to record 9.1% in February 2013. InMarch2013, the rate increased slightly to record 10.6%, and subsequently it has declined consistently over the last five-month period to record the lowest rate of 4.7% in August 2013. In September however, the rate inched up to recorded 5.4%.

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