Despite a sharp decline in Ghana’s overall producer price inflation in June, many businesses are still grappling with rising operating costs, particularly in the transport, utilities and hospitality sectors.
The latest Producer Price Index (PPI) released by the Ghana Statistical Service (GSS) shows that while overall producer inflation eased to 3.5 per cent in June, down from 5.8 per cent in May, several key sectors continued to record double-digit inflation, increasing the cost of doing business.
Transport and Hospitality Feel the Pressure
Businesses in the transport and hospitality industries recorded some of the highest producer inflation rates during the month.
Transport and storage activities registered 10.0 per cent inflation, while accommodation and food service activities recorded 10.8 per cent.
Within the transport sector, land transport experienced the steepest increase at 21.4 per cent, with air transport recording 10.3 per cent.
Accommodation services also saw a significant jump, rising from 3.1 per cent in May to 11.6 per cent in June, reflecting growing operational costs for hotels, guest houses and other accommodation providers.
Utility Costs Continue to Rise
Utility-related services also remained under inflationary pressure.
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Electricity and gas recorded the highest producer inflation among the major sectors at 12.5 per cent, up from 8.5 per cent in May.
Water supply, sewerage and waste management services also recorded inflation of 10.3 per cent.
Electric power generation, transmission and distribution posted 12.5 per cent, while water collection, treatment and supply recorded 14.4 per cent, indicating sustained cost increases across essential services.
Lower National Inflation Masks Sector Challenges
Although the national producer inflation rate declined, the figures suggest that many businesses are still absorbing higher production and operational costs.
Analysts say businesses facing persistent increases in transport, utility and accommodation costs may eventually pass some of the additional expenses on to consumers through higher prices for goods and services.
Mining Drives Overall Decline
The Ghana Statistical Service attributed the overall decline in producer inflation mainly to a slowdown in the mining and quarrying sector.
Inflation in the sector dropped sharply from 11.0 per cent in May to 2.6 per cent in June.
As mining and quarrying account for 43.7 per cent of the Producer Price Index basket, the decline had a significant impact on the national inflation rate despite continued price pressures in other industries.
