Ghana's producer price inflation fell sharply to 4.9 percent year-on-year in December, from 11.9 percent the month before, because of a big drop in the cost of utilities, the statistics office said on Wednesday.
Inflation has been higher than government targets for years and the country is following a $918 million International Monetary Fund programme partly as a result. But economists say they expect inflation to fall sharply in the coming months.
This is because of a base effect as a reduction in government fuel and utility subsidies a year ago, which raised inflation, passes through the system and is no longer reflected in the year-on-year figures.
"The sharp decline in the index was mainly on account of high increases in electricity and water tariffs in December 2015 and January last year," deputy government statistician Anthony Amuzu told a news conference in Accra.
Producer inflation in the mining and quarrying sector stood at 15.6 percent, for manufacturing it was 5.5 percent but for utilities it dropped from 38.2 percent a year ago to -7.0 percent in December, he said.
Ghana swore in a new president Nana Akufo-Addo on Jan. 7 and his party has vowed to create jobs, promote business and fight corruption as it seeks to deliver annual digit growth. It also says it will restore economic stability.
© Reuters News
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