Utility tariff increase causes rise of industrial inflation in Ghana

09:06, July 29, 2010      

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The increase of water and electricity prices brought about a remarkable hike of industry inflation, or the Producer Price Index (PPI), last June in Ghana, official statistics showed.

The Ghana Statistical Service (GSS) announced on Wednesday that the annual percentage difference in the PPI for June was 19. 42 percent, indicating an increase of 3.28 percent compared with that of 16.14 percent registered last May.

Sylvester Gyamfi, Director of Programmes Development and Management under GSS, informed the media here that utilities sub- sectors including production, transmission and distribution of electricity, and collection, purification and distribution of water recorded the highest annual increase in inflation at 71.30 percent.

"Utilities also recorded the highest monthly price difference with 71.38 percent," Gyamfi added.

Mining and Quarry, with 13.97 percent share of all industry, recorded the next highest increase of 23.48 percent while manufacturing, the largest industrial sub-sector, went up by 69.75 percent, taking the largest share of all industry inflation figure of 7.42 percent.

The PPI measures the average differences over time in prices received by domestic producers for the production of goods and services, with price reporting referenced to the base point of September 2006.

Head of Industrial Statistics at GSS, Asuo Afram, attributed the inflation increase last June only to the hike of water and electricity prices announced at the end of last May.

However, he said, since this rise in utility was usually a one- time affair in a long time, "We may not see the rise in utility again in the next six months".

"But as to whether prices would rise again for other manufactured goods would depend on how industry reacts to the utility tariff increase," Afram stated.

He warned that, with the country heavily dependent on imported

finished products, which acted as cheaper alternatives, industry should be careful in price increases.

Ghana's PPI had followed the consistent pattern of decrease set by the Consumer Price Index (CPI), but shot up suddenly in June as a result of over 68 percent of increase of utility tariffs beginning from June.

Source: Xinhua


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