Government missed its end of year inflation target of nine per cent as the latest figures from the Ghana Statistical Service (GSS) showed that 2013 ended with an inflation rate of 13.5 per cent.
The rate, which is the highest since March 2010 is about four percentage points farther than the projected single digit inflation by the government.
This means that on the average, the prices of goods and services went up by 13.5 per cent.
The government’s projection according to the 2014 budget statement was premised on the back of efforts to reduce fiscal deficit and maintain stability in the exchange rate to achieve its end of year inflation target of nine per cent.
Inflation, which measures the average change in the prices of goods and services acquired by households for the purpose of consumption, has been on an upward trend since the beginning of the year, moving above the single digit target.
At a news conference in Accra, the Government Statistician, Dr Philomena Nyarko, said inflation for January 2013 was 10.1 per cent; rose to 10.5 per cent in February, then to 10.6 per cent in March, while April recorded a rate of 10.9 per cent.
The increase was consistent throughout the year; May was 11.1 per cent, rose to 11.4 per cent in June, and then to 11.8 per cent in July. It, however, declined marginally to 11.5 per cent in August, then to 11.9 per cent in September; 13. 1 per cent in October; 13. 2 per cent in November and finally to 13. 5 per cent in December 2013.
Finance Minister, Mr Seth Tekper presenting the 2014 budget to Parliament said the increase in inflation in 2013 was influenced primarily by the pass-through effect of the fuel and utility price increases and demand pressures.
“To some extent, the rebasing of the Consumer Price Index (CPI) by the Ghana Statistical Service in May 2013 also influenced the high rate of inflation,” he added.
Meanwhile, when asked about the correlation between the government inflation targets and that of the GSS, Dr Nyarko told the GRAPHIC BUSINESS that the slip from government’s target was not a reflection of inadequate collaboration between the government and the GSS as far as the projection of inflation at a particular time is concerned.
To her, there were other factors that affected the real prices of goods on the market.
The GSS, she explained gives information based on the data they collect from the market and the service had no idea of the elements government uses to make its projection.
“There are many factors that affect inflation rate, so apart from policy we have exchange rates differences and other external factors that can affect inflation,” she said.
On what to expect in the new year, Dr Nyarko said the service was not in the position to forecast but would do its analysis based on the data collated and come out with the figures.
Meanwhile, the food component of the inflation basket recorded a rate of 7.2 per cent in December 2013 compared with the 7.3 per cent recorded in November.
The food inflation rate of 7.2 per cent was about one and a half times lower than the non-food inflation rate of 18.1 per cent.
On the regional front, Central Region recorded the highest rate of 14.8 per cent, while the Upper East Region recorded the lowest rate of 6.2 per cent.