The rate at which prices of goods and services changes has hit record low, breaking a 27-year record, after the basket for computation was updated to reflect current trends.
Inflation for August 2019 recorded 7.8 percent, the lowest since March 1992, using August 2018 as the new reference period. The new basket has 40 more items added, taking it to 307 items compared with the previous basket which had 267 items.
It must be noted that the drop in inflation from 9.4 percent in July is just as a result of rebasing which essentially takes into account changes in consumption patterns which were not otherwise captured in the previous basket for computation. Therefore, it doesn’t necessarily mean inflation has dropped to 7.8 percent from 9.4 percent, as both figures were computed using different bases.
The Food and non-alcoholic beverages group recorded a year-on-year inflation rate of 8.2 percent. Fruits and nuts (25.2%), Cereals and cereal products (10.6%), sugar, confectionery and deserts (9.0%), and Ready-made food and other food products (8.3%) were the major drivers of the food inflation.
The Non-food group recorded a year-on-year inflation rate of 7.4 percent in August 2019. Alcoholic Beverages, Tobacco and Narcotics (12.9%), Transport (10.2%) and Housing, water, electricity, gas and other fuels (9.9%) were the key drivers of the non-food inflation in August.
At the regional level, the year-on-year inflation rate ranged from 3.9 percent for Eastern region to 12.4 percent for Greater Accra region. Four regions (Greater Accra, Upper West, Central and Volta) recorded inflation rates above the national average (7.8%). Eastern region recorded the least inflation rate of 3.9 percent.