The general price levels of good and services, measured by consumer price inflation, has seen a fall since April this year – the very month which saw food prices soar abnormally as a result of panic buying to restock for the lock down – resulting in astronomic jump in the inflation rate.
Figures released by the Ghana Statistical Services (GSS) show that inflation for August 2020 recorded a rate of 10.5 percent, representing 0.9 percentage point lower than the 11.4 percent recorded in July. The main factor that drove the rate down was food and non-alcoholic beverages basket which saw a decline of 2.3 percentage points lower than the 13.7 percent recorded in July.
Two subgroups recorded inflation rates higher than the group’s average rate of 13.7 percent. They are vegetables (21.3%), fish and other seafood (14.3%) and this translates to food being the predominant driver of year-on-year inflation in August despite the overall rate in the group falling.
The non-food group on the other hand, recorded a year-on-year inflation rate of 9.9 percent in August 2020, 0.2 percentage point higher than the 9.7 percent recorded for July 2020. Inflation for locally produced items still remain higher than imported products. Inflation for imported items was 4.8 percent while that of locally produced goods was 12.6 percent.
At the regional level, the year-on-year inflation rate ranged from 4.7 percent in the Volta Region to 13.5 percent in the Greater Accra Region. Ashanti (11.2%), Western Region (11.6%), and Eastern (11.9%) all recorded inflation rates above the national average of 10.5 percent. Volta Region had the lowest year-on-year inflation rate
The Bank of Ghana’s Monetary Policy Committee (MPC) says the sharp rise in inflation in the second quarter, as it increased to 10.6 in April form the 7.8 percent recorded in all three months at the beginning of the year, has disrupted the disinflation process with a potential of prolonging the time horizon for reaching steady state inflation, adding inflation expectations of the financial sector, businesses, and consumers have all trended upwards.