By Juliet ETEFE (Juliet.etefe@thebftonline.com)

The Producer Price Index (PPI) showed a notable decline in July 2025, dropping to 3.8 percent from 5.8 percent in June, as reported by the most recent data from the Ghana Statistical Service (GSS).

This represents the lowest level seen since November 2023 and continues the downward inflation trend for the sixth straight month.

The PPI measures the average fluctuation in prices obtained by local manufacturers for products and services. According to monthly data, production costs rose by 1.6 percent—suggesting that although annual inflation has decreased, immediate pricing pressures continue.

Sectoral performance

The decline in July was mainly caused by significant price reductions in the two biggest industries—mining and manufacturing—which make up almost 79% of the index.

The sector of mining and quarrying, contributing 43.7 percent, experienced a reduction in inflation rates—from 6.5 percent in June down to 4.6 percent in July… a drop of 1.9 percentage points.

Production – accounting for 35 percent of the PPI index – declined further, dropping from 7.2 percent to 3.6 percent, reducing by 3.6 percentage points.

The energy and utility industry defied the overall pattern, increasing from 5.1% in June to 6.7% in July; thus becoming the main driver of rising inflationary pressure. Likewise, services related to water provision, sewage, and garbage disposal saw a small increase, moving from 3.6% to 4.1%.

The construction industry experienced an annual inflation rate of 5.3%, slightly lower than 6.0% in June. Among the sub-sectors, civil engineering works saw the highest inflation at 11.7%, whereas building construction faced deflation at -8.3%.

In the meantime, the service industry still showed minimal price increases of only 0.5 percent compared to last year, a decrease from 0.7 percent recorded in June. Transport and logistics experienced significant falling prices, dropping more sharply from -7.0 percent to -8.1 percent. Lodging and dining services remained stable at -2.7 percent, whereas information and communications saw a small rise of 2.6 percent.

Sub-sector highlights

A detailed examination of sector-specific information highlights the varied scenario inside Ghana’s manufacturing industry.

During production, inflation did not affect all sectors equally. Certain areas like the production of automobiles (35.8%), leather goods (33.2%) and fabrics (24.8%) experienced sharp increases in costs, whereas other fields including wooden items (-13.5%), processed oil (-12.6%) and raw metal (-9.3%) faced substantial drops in prices.

In the sectors of mining and quarries, auxiliary services experienced the greatest rate of increase at 53.8 percent, while the production of raw petroleum and natural gas remained in decline, showing a decrease of -28.1 percent. Inflation within metal ore mining decreased marginally to 33.1 percent from 33.6 percent observed in June.

With regard to services, air transportation costs increased by 23.0 percent, whereas land transport saw a rise of 7.1 percent. In comparison, lodging services decreased by -4.9 percent, despite an increase of 10.8 percent in food and drink service operations.

Outlook

The newest update indicates that Ghana’s producer price inflation has moved into a phase of greater steadiness, although differences across sectors are still significant. The ongoing drop in inflation within the mining and manufacturing industries has played a key role in this overall deceleration.

Government statistician Dr. Alhassan Iddrisu pointed out that should the cost reductions resulting from declining production prices be passed on to customers, “real improvement might be observed at the point of sale,” especially in sectors like transportation and power, where household expenditure is highly responsive.

He suggested: “For companies, reconsider your pricing strategy and negotiate wisely. Declining expenses offer chances but also reduce profit levels. Remain competitive through innovation rather than merely changing prices.”

For the government, ensure stability, enhance productivity, and assist vital industries such as mining and manufacturing through effective incentives to stimulate demand, safeguard employment, and maintain progress.

Keep an eye on watch prices for homes and individuals. When production expenses decrease, store charges ought to follow—assuming everything else stays the same. Make informed purchases, examine profit margins, and back companies that share their cost reductions.

July’s data reflects the lowest PPI seen since November 2023, indicating an ongoing trend of slowing price increases, which offers some hope for the overall economy. However, varying performance across different industries underscores the importance of close observation. Should cost reductions in critical areas be efficiently passed along the supply chain, consumers may see additional relief in the coming months.

Supplied by SyndiGate Media Inc. (
Syndigate.info
).