Dr Philomena Nyarko
Ex-factory price inflation increased sharply from a revised figure of 11.0 percent in December 2015 to 16.3 percent in January this year, mainly on account of increases in petroleum prices, Government Statistician announced yesterday in Accra.
Dr Philomena Nyarko stated that the sharp rise for all industry in January was driven mainly by the manufacturing sector influenced hugely by increases in petroleum prices.
Government introduced a 27 percent hike in petroleum prices at the beginning of the year in an attempt to settle the TOR debts and improve costs and that has had rippling effects on the prices of almost all commodities, making life difficult for a lot of Ghanaians.
Under the circumstances, growth has had to shrink, particularly due to low commodity prices due to ‘dumsor.’
With the monthly change rate for January 2016 recording 3.3 percent, the utilities sub-sector recorded the highest year-on-year producer price inflation rate of 56.6 percent.
This was followed by the manufacturing sub-sector with 11.4 percent.
The mining and quarrying sub-sector recorded the lowest year-on-year inflation rate of 2.9 percent.
Manufacturing recorded the highest inflation rate of 4.3 percent for January followed by the mining and quarrying sub-sector with 2.3 percent.
The monthly rate for utilities sub-sector remained unchanged.
The International Monetary Fund (IMF) last year approved a three-year economic bailout arrangement under the Extended Credit Facility (ECF) for Ghana with a total of about $918 million in support of the government’s medium-term economic reform program.
It is targeted at restoring debt sustainability and macroeconomic stability to foster a return to high growth and job creation, while protecting social spending.
“After two decades of strong and broadly inclusive growth, large fiscal and external imbalances in recent years have led to a growth slowdown and are putting Ghana’s medium-term prospects at risk. Public debt has risen at an unsustainable pace and the external position has weakened considerably. The government has embarked on a fiscal consolidation path since 2013, but policy slippages, exogenous shocks and rising interest costs have undermined these efforts. Acute electricity shortages are also constraining economic activity,” the IMF averred.
By Samuel Boadi