Ghana’s producer price inflation surged to unprecedented levels in May 2024, reflecting mounting pressures on the nation’s production costs. The year-on-year inflation rate at ex-factory prices for all goods and services rose to 23.6%, significantly higher than the 16.8% recorded in April 2024, according to the Ghana Statistical Service.
Month-on-month, the producer inflation rate registered a 3.0% increase, further compounding concerns about the escalating production cost environment. The industrial sector, excluding construction, saw producer price inflation escalate to 29.2% in May from 20.2% the previous month, underscoring the widespread cost pressures affecting producers.
The construction sector bore the brunt of the inflationary surge, with rates skyrocketing to 54.7%, marking it as the most affected sector. This sharp rise in construction costs is expected to ripple through the economy, potentially stalling new projects and impacting housing affordability.
In the services sector, inflation rates edged up from 9.4% in April to 11.4% in May, indicating that cost increases are not confined to goods alone but are permeating through various service-related activities.
Sector-specific inflation rates reveal stark disparities. Mining and quarrying saw a steep rise to 40.6%, while accommodation and food services activities and electricity and gas sectors recorded inflation rates of 25.9% and 25.4%, respectively, all above the national average of 25.3%.
Conversely, the water supply, sewerage, and waste management sector recorded the lowest inflation rate at 7.4%.
These inflationary trends highlight the broad-based nature of cost increases across Ghana’s economy, raising concerns about the sustainability of current price levels and their potential impact on economic growth and consumer welfare.