This figure represents a 25.9% drop in the production price index (PPI), from 78.1% recorded in November to 52.2% recently reported for the month of December.
The PPI is a price index that measures the average changes in prices received by domestic producers for their output, which is of course subject to the level of production within the economy under review.
This reduction in PPI also represents an inevitability in the Ghanaian economy. With the price for production dropping, the amount consumers would have to pay for said produced goods would also decline.
As a result, it is more than likely that the 25% drop in PPI is going to positively affect the country’s consumer inflation.
This eventuality is also evident in the fact that the December rate was largely driven by a drop in the industry sector which decreased from 94.3% in November to 65.7%
Other key figures include a 4.5% decrease in the construction sector from 26.6% recorded in November 2022 to 22.1% recorded in December.
A 2.6% drop in the service sector, which dipped from 12.6% in November to 10.0% in December.
Throughout 2022, Ghana went through its worst economic year in over 2 decades. The country experienced its worst inflation in recent history, which had its Cedi, the Ghanaian currency at the bottom of the list of the world’s best performing currencies.
However, this drop in PPI is consistent with the upward trajectory the country has been on for the past month. The announcement follows the news that Ghana’s Cedi was named one of the best performing in the world after regaining 61% of its value against the dollar in December. Read the story here.
Other good news has also trailed the country, like securing a staff level agreement for its $3 billion loan request from the International Monetary Fund.