GSS urges targeted incentives to sustain economic stability
The Ghana Statistical Service (GSS) is calling on the government to consolidate recent macroeconomic stability by introducing targeted incentives aimed at stimulating production and sustaining demand, particularly in key industrial sectors such as mining and manufacturing.
This appeal follows the release of the June 2025 Producer Price Index (PPI), which revealed a sharp decline in inflation across Ghana’s industrial, construction, and services sectors.
While the drop in producer inflation is expected to relieve some cost pressures on businesses, the GSS cautioned that it may also signal underlying weaknesses in market demand, potentially threatening output and employment if not addressed.
Producer Inflation Slows Across Key Sectors
According to the latest data, producer inflation dropped significantly to 5.9 percent in June 2025, down from 10.1 percent in May. On a month over month basis, producer prices declined by 1.4 percent, signaling broad based price softening across the economy.
In the industry and construction category, which includes mining, manufacturing, electricity, and waste management, annual inflation fell to 6.8 percent, down from 10.1 percent the previous month.
The construction sector followed closely, recording an annual inflation rate of 6.0 percent, with a monthly decline of 0.4 percent.
The services sector posted the lowest inflation rate at 0.7 percent, coupled with a 0.3 percent monthly drop in prices.
Mining and Manufacturing Under Pressure
Two of Ghana’s most significant industrial sectors, mining and quarrying and manufacturing, registered pronounced declines in price growth.
Inflation in the mining sector dropped to 6.5 percent, down from 13.7 percent in May, reflecting a 2.0 percent month over month decrease. Manufacturing also saw a deceleration, with inflation falling to 7.6 percent year over year, alongside a monthly reduction of 0.9 percent.
Despite the easing cost pressures, the GSS underscored the critical role these sectors play in Ghana’s industrial base. Together, they contribute nearly 80 percent of total industrial output (excluding construction), making them central to the country’s economic performance.
While sub sectors such as motor vehicle and trailer manufacturing (35.8 percent) and leather production (32.4 percent) experienced strong price inflation, others including refined petroleum and crude oil extraction recorded negative inflation, attributed to global commodity trends and domestic constraints.
Uneven Trends in Construction and Services
In the construction sector, performance was mixed. Building construction saw deflation of minus 6.7 percent year over year, while civil engineering and specialized construction posted inflation rates of 11.5 percent and 17.5 percent respectively, indicating varying levels of activity and cost pressures across sub sectors.
In the services sector, accommodation and food services experienced deflation of minus 2.7 percent, while transport and storage posted a notable minus 7.0 percent. These figures reflect continued fragility in post pandemic demand, particularly within consumer facing service industries.
Smart Incentives Needed to Sustain Momentum
In its commentary on the data, the GSS noted that the current moderation in producer inflation presents both an opportunity and a cautionary signal.
While the decline may help businesses stabilize operations, it could also indicate a cooling in demand, which may dampen investment and job creation.
“For government, lock in stability, boost production, and support key sectors like mining and manufacturing with smart incentives to drive demand, protect jobs, and keep the momentum strong,” the GSS stated.
As the country continues to navigate the aftermath of inflation shocks and ongoing currency pressures, policymakers are being urged to act swiftly.
Strategic interventions, the report suggests, could help sustain inclusive growth and safeguard gains made in industrial performance during the second half of the year.
