Producer Inflation rises to 4.0% as mining, manufacturing push up business costs

Ghana’s producer price inflation increased to 4.0% in July 2026, up from 3.5% in June, signalling renewed pressure on the cost of producing goods and delivering services across the economy.

The latest figures, contained in the July 2026 Producer Price Index (PPI) released by the Ghana Statistical Service (GSS), show a 0.5 percentage-point increase in year-on-year producer inflation.

Presenting the data, Government Statistician, Alhassan Iddrisu (PhD), explained that the Producer Price Index serves as an important early-warning indicator of inflationary pressures because it captures price movements at the producer or factory-gate level before they potentially filter through to consumers.

The July figures also point to a significant short-term acceleration in producer prices.

Producer inflation increased by 2.0% between June and July 2026, compared with a 3.7% decline recorded between May and June.

According to Iddrisu, the sharp month-on-month movement was largely driven by developments in the mining and quarrying sector, where producer prices increased by 12.4 percentage points over the period, reflecting higher gold prices.

Mining and quarrying, which carries the largest weight in Ghana’s PPI basket at 43.7%, recorded year-on-year producer inflation of 3.5% in July, compared with 2.6% in June.

The sector consequently made the largest contribution to the overall increase in producer inflation, accounting for 1.5 percentage points of the 4.0% headline rate.

Manufacturing, with a weight of 35.0%, also contributed to the increase. Producer inflation in the sector edged up from 3.5% in June to 3.7% in July, contributing 1.3 percentage points to the headline figure.

Electricity and gas recorded one of the highest year-on-year inflation rates, rising from 12.5% to 13.3%, while water supply, sewerage and waste management recorded 10.1%.

Transport and storage also remained elevated at 10.1%, while accommodation and food service activities recorded 9.9%.

By contrast, information and communication recorded significantly lower producer inflation at 0.7%.

The latest PPI data could have important implications for businesses, particularly manufacturers, mining companies, transport operators and other enterprises exposed to changes in production and operating costs.

The GSS has cautioned that rising producer prices can increase production costs and may eventually translate into higher prices for consumers if businesses pass those costs through the supply chain.

Iddrisu therefore urged businesses and investors to pay close attention to producer-price developments as they make pricing, inventory, investment and procurement decisions.

Businesses have been encouraged to improve operational efficiency, maintain adequate inventories of critical inputs, secure reliable suppliers and consider longer-term supply contracts as strategies for managing potential cost increases.

The three broad sectors recorded different inflationary trends during the month.

Industry, excluding construction, saw year-on-year producer inflation rise sharply from 3.3% in June to 5.6% in July.

Construction, however, eased marginally from 4.9% to 4.8%, while services declined from 2.6% to 2.5%.

Within construction, building activities recorded the highest producer inflation at 7.9%, followed by specialised construction activities at 4.3% and civil engineering at 3.5%.

The services sector also recorded notable variations among its sub-sectors, although telecommunications recorded no change in producer prices during the month.

The strong month-on-month increase in producer inflation was particularly pronounced in mining and quarrying.

The sector moved from a 9.4% month-on-month deflation in June to 3.0% inflation in July, representing a 12.4 percentage-point swing.

This development underscores the importance of commodity-price movements to Ghana’s domestic production environment, particularly given the substantial weight of mining and quarrying in the country's producer-price index.

While the PPI measures prices received by producers rather than retail prices paid by households, sustained increases at the producer level can eventually feed into consumer prices.

The GSS consequently warned that consumer price pressures could increase if higher factory-gate and production costs are passed on to consumers.

Households have therefore been advised to budget carefully for essential services, particularly electricity, water and transport, where producer-price pressures remain relatively high.

The July PPI figures also provide policymakers with an important indicator for assessing emerging cost pressures within the economy.

According to the GSS, rising producer inflation calls for prudent policies aimed at containing production costs while supporting sustained economic growth.

The Statistical Service has recommended targeted support for sectors experiencing persistent price pressures, particularly transport, utilities and food services, while encouraging measures that can lower production costs and improve business competitiveness.

Despite the July increase, the GSS described producer inflation as moderate but persistent, with mining and quarrying remaining the principal driver.

The July 2026 PPI was based on monthly price data collected from 603 producers covering 2,639 products across Ghana, with the index using March 2020–February 2021 as its base period.

The July figures are provisional and may be revised as additional data becomes available.

The Government Statistician, Alhassan Iddrisu (PhD), said reliable producer-price statistics remain critical for government, businesses, investors and other economic stakeholders because they provide evidence for planning, pricing and policy decisions.

Story by: Joshua Kwabena Smith