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Need to arrest inflation from multiple perspectives

Need to arrest inflation from multiple perspectives

A cursory look at the rising inflation figures in the country has shown that, regionally, there are different drivers to this phenomenon.

While in the Greater Accra Region, for instance, inflation can be driven by the cost of housing and food , among other things, in particular month in review, in the northern part of the country it may more be due to food.

This scenario has begged the question as to whether the government has to tackle inflation holistically or deal with the challenges, taking into consideration the drivers in each region after carefully analysing the trend over a period.

With Inflation for February surging to 15.7 per cent, up from the 13.9 per cent recorded in January, the need for another look at how to tackle the problem has arisen.

The Government Statistician, Professor Samuel Annim, told the Daily Graphic that there was the need to arrest the rising inflation from multiple perspectives.

“From our study, tackling inflation with a one size fits all solution will not achieve the needed results,” he said.

According to him, what causes inflation in one region may differ from another, hence the need to tackle the issues regionally to be able to achieve the needed result.

“If you look at our results, it clearly shows the causes from the regional perspective and I think the solution should be targeted and not one size fits all.

The rise in the inflation rate for the month of February represents an increase of 1.8 percentage points over the period.

This is the highest inflation recorded by the country in almost six years, after it recorded a rate of 17.4 per cent in October 2016.

The main drivers of last month’s inflation were the housing, water, electricity, gas and other fuels division, which recorded the highest inflation rate of 25.4 per cent.

This was followed by the transport, and food and non-alcoholic beverages divisions, which recorded inflation rates of 18.3 per cent and 17.4 per cent, respectively.

The education service division recorded the lowest inflation rate of 1.3 per cent.

Regional inflation

At the regional level, the overall year-on-year inflation ranged from 11.6 per cent in the Western Region to 19.5 per cent in the Greater Accra Region.


Eastern Region recorded the highest month-on-month inflation (7.3%), with the Upper East Region recording a negative month on-month inflation rate of -0.9 per cent.

Food and Non-Food Inflation

Last month’s food inflation of 17.4 per cent was higher than January’s food inflation of 13.7 per cent and the average of the previous 12 months (10.8%).

Food inflation’s contribution to total inflation also increased from 44.2 per cent in January 2022 to 49.4 per cent in February 2022.

Overall month-on-month food inflation was also 3.2 per cent, which is higher than both the 12 month national month-on-month rolling average of food inflation (1.3%) and the rate recorded for February 2021 (0.0 per cent).

All the 15 food subclasses recorded positive month-on-month inflation, with water recording the highest (9%).

Non-food year-on-year inflation on average went up again in February 2022, compared with January 2022 (from 14.1 % to 14.5 %).

Only one out of the 12 Non-food Divisions had the 12 months rolling average to be higher than the year-on-year inflation for February 2022 for the divisions.

Imported and local inflation

The inflation for imported goods was 12.9 per cent, which is higher than the 11 per cent recorded for January 2022.

Inflation for locally produced items on the other hand was 16.7 per cent, up from the 15 per cent recorded in January 2022.

Definition, measurement

The Consumer Price Index (CPI) measures the changes in the price of a fixed basket of goods and services purchased by households.

The assumption is that the basket is purchased each month, hence as price changes each month, the total price of the basket will also change.

Therefore, the rate of inflation is the relative change in CPI between periods.

Inflation is reported year-on-year (annual inflation) and month-on-month (monthly inflation) and granulated to determine regional and commodity type and source of inflation.

It must be noted that the CPI does not measure price levels. Instead, it is a price perspective measure and cost-of-living index and an expenditure oriented measure.

Prices are collected for approximately 39,500 products every month and in 44 markets. Prices are collected from 7,726 outlets. Products are ordered in a hierarchy of 13 divisions, 44 groups, 98 classes, 156 subclasses and 307 items.

Every item can only be part of one subclass, and every subclass can only be part of one class.

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