Producer Price Inflation Drops to 1.6% in January
By Praisebell Rosemond Larbi
Producer price pressures in Ghana continued to ease at the start of 2026, with the latest data from the Ghana Statistical Service showing a marginal decline in inflation at the factory gate.
The Producer Price Inflation (PPI) rate fell to 1.6 percent in January 2026, down from 1.9 percent recorded in December 2025, representing a 0.3 percentage point drop. On a year-on-year basis, this indicates that the prices producers receive for goods and services increased by 1.6 percent between January 2025 and January 2026.
More significantly, the latest figure marks a sharp decline of 26.9 percentage points compared to the 28.5 percent recorded in January 2025, highlighting a substantial easing in producer price pressures over the past 12 months.
However, on a month-on-month basis, the data points to renewed short-term cost pressures. Producer prices rose by 3.3 percent in January 2026, reversing the 0.8 percent contraction recorded in December 2025. This suggests that while long-term inflation is moderating, businesses may still face rising input costs in the near term.
A sectoral breakdown reveals mixed trends across the economy. The mining and quarrying sector, which carries the largest weight of 43.7 percent in the PPI basket, recorded a year-on-year inflation rate of 3.7 percent in January 2026, up slightly from 3.3 percent in December 2025.
In contrast, the manufacturing sector, which accounts for about 35 percent of the index, saw a notable decline in inflation, dropping to negative 2.2 percent from 0.1 percent over the same period. This suggests easing cost pressures for manufacturers, potentially providing some relief for industrial production.
Utility-related sectors, however, recorded sharp increases. Inflation for electricity and gas surged to 14.8 percent in January 2026, up from 6.1 percent in December 2025, while water supply, sewerage, and waste management rose significantly to 9.9 percent from 2.3 percent.
Other sectors continued to experience deflation. Transport and storage recorded a deeper negative inflation rate of 6.9 percent, compared to negative 3.7 percent in December 2025. Similarly, accommodation and food service activities saw deflation widen to negative 5.4 percent from negative 3.2 percent.
Meanwhile, the information and communication sector posted a slight moderation, with inflation easing to 1.4 percent from 1.7 percent.
Overall, the data presents a nuanced picture of Ghana’s production landscape. While the sharp year-on-year decline in producer inflation signals improving macroeconomic stability and easing cost pressures, the strong monthly uptick suggests emerging risks that could influence pricing decisions in the months ahead.
For businesses and policymakers alike, the challenge will be to sustain the downward trend in inflation while addressing sector-specific cost increases, particularly in utilities, to ensure that gains in stability translate into broader economic growth.
