Producer inflation drops to 1.4% in Oct, lowest in four years

By Juliet ETEFE ([email protected])

Producer price inflation (PPI) fell sharply to 1.4 percent in October 2025 – marking the lowest rate recorded in four years, according to the Ghana Statistical Service’s (GSS) latest release.

This figure represents a further decline from the 3.2 percent registered in September and extends the disinflationary trend observed across major industrial sectors throughout the year.

The PPI measures average change over time in the prices domestic producers receive for their goods and services.

Despite the sharp slowdown in annual inflation, month-on-month producer prices rose by 1.2 percent between September and October compared with a 0.9 percent increase the previous month.

This indicates that while long-term inflation has cooled significantly, short-term price pressures persist within some industries.

Sectoral performance

The headline decline was driven largely by steep disinflation in mining and quarrying, the sector with greatest influence on PPI figures by virtue of its 43.7 percent weight in the basket.

Inflation in the mining sector slipped to 0.7 percent in October, down from 5 percent in September, representing a drop of 4.3 percentage points. The slowdown was broad-based, reflecting easing cost pressures across key mining activities.

Electricity and gas also contributed to the downward trend. The sector’s inflation rate fell sharply from 9 percent in September to 5 percent in October. For much of the year, energy inflation has remained volatile, often dictating the direction of overall producer prices given its critical role in industrial production.

Manufacturing – the PPI’s second-largest component with a 35 percent weight – saw inflation rise modestly from 1.7 percent in September to 2.5 percent in October. Although this marks a slight increase, the sector continues to enjoy relatively subdued cost pressures compared with last year when double-digit factory-gate inflation was common.

Construction also experienced a substantial cooling in producer prices. Annual inflation for the sector dropped to 0.4 percent in October from 4.6 percent in September. Within the sector, civil engineering activities registered some upward pressure while building construction continued to record negative inflation – indicating falling cost for materials in that sub-category.

The services sector remained generally weak, recording marginal price movement across most subsectors.

Accommodation and food service activities posted a year-on-year decline of 1.8 percent while transport and storage remained in deep negative territory at -8.8 percent, pointing to ongoing disinflationary effects in logistics and mobility-related services.

Sub-sector highlights

A closer review of the October data reveals considerable divergence across specific industries. In manufacturing, sectors such as food products, rubber and plastics, textiles, and fabricated metal products saw moderate price increases. Conversely, refined petroleum products, wood products and basic metals recorded declines, highlighting uneven recovery across the industrial landscape.

In services, air and water transport activities saw strong year-on-year growth while warehousing, publishing and select administrative services contracted. This reflects persistent weakness in certain parts of the service economy – particularly those sensitive to energy and logistics costs.

Mining support service activities showed some of the highest inflation rates within the broader mining category, even as extraction activities such as crude oil and natural gas recorded contractions. These contrasts underscore the mixed performance across Ghana’s industrial ecosystem.

Recommendation

Government Statistician Dr. Alhassan Iddrisu urged stakeholders to use the new cost environment for supporting economic resilience.

He encouraged businesses to take advantage of lower input costs to improve production efficiency and strengthen competitiveness, while advising government to sustain reforms in energy, logistics and manufacturing to lock in stability.

He further noted that households should monitor market prices closely, emphasising that easing producer prices should – all things being equal – translate into relief at the retail level, especially in essential expenditure areas such as transport, food and utilities.

With October’s figure representing the lowest producer inflation rate since 2021, analysts say the trend offers a positive signal for the broader economy.

However, they caution that the uneven sectoral performance means transmission of lower producer prices to consumers may vary across industries. Continued monitoring will therefore be essential in assessing the durability of disinflation path in coming months.

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