The latest Producer Price Index (PPI) YoY for Ghana, released on November 19, 2025, registered a modest 1.40% increase. This figure falls significantly short of the 3.40% market estimate and the 3.20% recorded in October 2025, according to the Sigmanomics database. The PPI measures the average change over time in the selling prices received by domestic producers for their output, serving as a key leading indicator for consumer inflation trends and business cost pressures.

Drivers this month

• Energy and fuel prices eased, contributing -0.80 percentage points to the PPI slowdown.
• Manufacturing sector prices rose marginally by 0.50%, down from 2.10% last month.
• Agricultural input costs remained stable, adding 0.30 percentage points.

Policy pulse

The 1.40% PPI reading is well below the Bank of Ghana’s inflation target corridor of 6% ± 2%. This signals easing upstream inflation pressures, potentially allowing the central bank to maintain or cautiously ease its current tight monetary policy stance, which includes a policy rate of 25.50% as of October 2025.

Market lens

In the immediate aftermath of the release, the Ghanaian cedi (GHS) appreciated 0.30% against the USD, reflecting improved inflation outlooks. Short-term government bond yields declined by 10 basis points, while breakeven inflation swaps for two years fell from 8.20% to 7.60%, indicating market expectations of moderated inflation ahead.

The PPI’s sharp deceleration contrasts with the volatile trajectory observed earlier in 2025. In May, the PPI peaked at 18.50%, driven by post-pandemic supply chain disruptions and surging commodity prices. Subsequent months saw a steady decline: 10.20% in June, 5.90% in July, and a gradual easing to 3.80% in August and 3.00% in September. The November figure of 1.40% is the lowest in over six months, reflecting a normalization of producer cost pressures.

Monetary policy & financial conditions

The Bank of Ghana’s aggressive rate hikes since mid-2024 aimed to curb inflationary pressures stemming from currency depreciation and rising import costs. The PPI’s downward trend supports the effectiveness of these measures. However, real interest rates remain elevated, constraining credit growth and investment.

Fiscal policy & government budget

Fiscal tightening continues to weigh on domestic demand. The government’s 2025 budget targets a deficit reduction to 5.20% of GDP, down from 6.10% in 2024. Reduced subsidies and improved tax collection have helped, but public spending remains constrained, limiting stimulus effects on producer prices.

External shocks & geopolitical risks

Global energy price volatility and geopolitical tensions in key commodity-exporting regions pose downside risks. Ghana’s reliance on imported fuel and raw materials makes the PPI vulnerable to external shocks, which could reverse the current easing trend.

The monthly trend shows a consistent downward slope since mid-2025, with the PPI falling below the 3% threshold for the first time since August. This suggests that input costs for producers are stabilizing, which should eventually translate into lower consumer inflation if the trend persists.

Market lens

Immediate reaction: The Ghanaian cedi strengthened by 0.30% against the USD, while 2-year government bond yields declined by 10 basis points, reflecting market optimism on inflation control.

Looking ahead, the PPI’s trajectory will depend on several factors. A bullish scenario (30% probability) envisions continued global commodity price stability, successful fiscal consolidation, and sustained monetary discipline, pushing PPI growth below 1% by Q1 2026. This would ease inflationary pressures and support economic growth.

The base case (50% probability) assumes moderate external volatility and steady domestic demand, keeping PPI growth around 1.50%–2.00% in the near term. This scenario supports a cautious monetary policy stance with gradual easing possible in late 2026.

The bearish scenario (20% probability) involves renewed external shocks, such as energy price spikes or geopolitical disruptions, combined with fiscal slippage. This could push PPI growth back above 4%, forcing the Bank of Ghana to maintain or tighten monetary policy, risking slower growth.

Structural & long-run trends

Long-term, Ghana’s PPI is influenced by structural factors including diversification of the economy, improvements in supply chain infrastructure, and energy sector reforms. Enhanced local production capacity and reduced import dependence could stabilize producer prices and reduce inflation volatility.

The November 2025 PPI YoY reading of 1.40% signals a meaningful easing in producer price inflation in Ghana. This aligns with broader macroeconomic trends of tighter monetary policy, fiscal consolidation, and moderated external pressures. While the outlook is cautiously optimistic, risks from global commodity markets and fiscal challenges remain. Policymakers should balance inflation control with growth support, leveraging structural reforms to sustain price stability.

Key Markets Likely to React to Producer Price Index YoY

The Producer Price Index YoY is a critical gauge of inflationary pressures that directly impacts currency valuations, bond yields, and equity markets sensitive to input costs. Markets tracking Ghana’s PPI include the Ghanaian cedi (GHS/USD), local government bonds, and commodity-linked stocks. Movements in these assets often reflect shifts in inflation expectations and monetary policy outlooks.

• GHSGHSUSD – The Ghanaian cedi’s exchange rate is sensitive to inflation data, influencing import costs and capital flows.
• GCB – Ghana Commercial Bank’s stock price correlates with economic growth and inflation trends.
• MTNGH – MTN Ghana’s shares reflect consumer spending power affected by inflation.
• BTCUSD – Bitcoin often reacts inversely to inflation expectations and currency volatility.
• USDGHS – The USD/GHS pair is a direct barometer of Ghana’s inflation and monetary policy environment.

Insight: PPI vs. GHSGHSUSD Exchange Rate Since 2020

Since 2020, Ghana’s PPI YoY and the GHSGHSUSD exchange rate have shown a positive correlation. Periods of rising PPI often coincide with cedi depreciation due to inflationary pressures and reduced purchasing power. For example, the May 2025 PPI spike to 18.50% aligned with a 12% cedi depreciation against the USD. The recent PPI easing to 1.40% has supported a 3% cedi appreciation, highlighting the PPI’s role as a leading indicator for currency movements.

FAQ

What is the Producer Price Index YoY for Ghana?

The Producer Price Index YoY measures the annual change in prices received by producers in Ghana. The latest reading is 1.40% as of November 2025.

How does the PPI affect Ghana’s economy?

The PPI signals inflationary pressures at the production level, influencing consumer prices, monetary policy, and economic growth.

What are the risks to Ghana’s PPI outlook?

Risks include global commodity price volatility, fiscal deficits, and geopolitical tensions that could reverse the current easing trend.

Takeaway: Ghana’s November 2025 PPI YoY slowdown to 1.40% signals easing inflation pressures, supporting cautious monetary easing but requiring vigilance on external and fiscal risks.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.