Economy

Second quarter producer price index down to 11.3%

The second quarter producer inflation was down to 11.37%, from 13.66% the previous quarter, and 16.26% in Q4, 2022. 

This would have been good news for manufacturers, except inflation on electricity, water supply, sewerage, waste management and remediation activities was up 39.87 percent in the twelve months to June 2023.

Manufacturers of chemicals and chemical products suffered the highest increase in producer prices at 44.05%.

Producer or core inflation contributes about 0.8 to 1.4 percentage points in the consumer price index.  It is usually the target of monetary policy because demand for food and fuel is relatively price inelastic. 

At US$ 1.713 billion food imports are up 36 percent year to August 2023.

Unlike for consumer inflation, KNBS tracks producer inflation at the middle of a quarter and reports at the last month.

The lag means we are yet to fully see the effect of the finance act 2023, and recent increases in fuel prices on the PPI.

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