Ghana’s annual producer inflation eases to 1.6 per cent despite sharp monthly jump

New data from the Ghana Statistical Service (GSS) reveals a cooling of long-term price pressures at the factory gate, with annual Producer Price Inflation (PPI) dipping to 1.6 per cent in January 2026.

This reflects a marginal decline from the 1.9 per cent recorded in December 2025.

The figures, released today, February 18, 2026 by Ghana Statistical Service, highlight a dramatic shift compared to the same period last year, when PPI stood at a staggering 28.5 per cent. While the year-on-year trend shows significant easing, a sharp 3.3 per cent month-on-month increase in January suggests that producers are facing renewed short-term cost spikes.

Sectoral Performance: Energy and Mining Surge

The headline moderation masks significant volatility across different sectors of the economy. While manufacturing and transport saw prices contract, the energy and mining sectors recorded substantial increases.

Sector                              Jan. 2026 PPI         Dec. 2025 PPI       Change (Percentage points)

(Y-on-Y)               (Y-on-Y)

Electricity & Gas                14.8%                       6.1%                            +8.7

Water & Waste Mgt             9.9%                        2.3%                            +7.6

Mining & Quarrying            3.7%                        3.3%                            +0.4

Manufacturing                     -2.2%                       0.1%                            -2.3

Transport & Storage            -6.9%                       -3.7%                           -3.2

Mixed Signals for the Economy

The Mining and Quarrying sector, which holds the largest weight in the PPI basket (43.7 per cent), remains a primary driver of inflation. However, the most alarming jump occurred in Electricity and Gas, where inflation more than doubled in a single month. This surge in utility costs is likely the culprit behind the high month-on-month momentum.

Conversely, the Manufacturing sector—accounting for 35 per cent of the index—plunged further into deflationary territory at -2.2 per cent. While this may lower costs for some downstream businesses, prolonged deflation in manufacturing can sometimes signal weakened demand or oversupply.

Outlook

Economists warn that the 3.3 percent month-on-month jump is a “red flag” that could eventually spill over into consumer prices. If the high costs in electricity and water supply persist, businesses may be forced to pass these expenses on to consumers, potentially challenging the Bank of Ghana’s recent efforts to maintain price stability.

The significant easing over the past year is a major victory for fiscal consolidation. However, the January utility spikes remind us that the ‘factory gate’ is still sensitive to structural costs.

Source: By Eben Agyekum-Boateng, 3Business