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Inflation drops to 53.6%
Professor Samuel Kobina Annim, Government Statistician

Inflation drops first time in 19 months

The general price levels, inflation, for the first time in 19 months, fell marginally from 54.1 per cent at the end of December last year to 53.6 per cent in January this year.

This represents 0.5 percentage points drop.

Prior to the drop, the country’s inflation has been on the rise in the last 18 months, a situation which prompted the Bank of Ghana to also consistently increase the monetary policy rate which now stands at 28 per cent.

Despite inflation dropping last month, the 53.6 per cent still represents a 22-year high since April 2001. The April 2001 inflation stood at 59.7 per cent.

The International Monetary Fund (IMF) and other international agencies have all predicted global inflation to slow down this year but it is not yet clear whether the trajectory as began this last month will be sustained, considering factors such as fuel price increases which might trigger a corresponding increase in transport fares.

The Managing Director of the IMF, Kristalina Georgieva, in a recent interview, said the fund was projecting inflation to slow down towards the end of the year, provided central banks stay the course.

She, therefore, advised governments not to take actions that would distort this projection.

The Economist Intelligence Unit (EIU) is also predicting that inflation in Ghana would average about 20 per cent in 2023 albeit, the signals to achieve that are not yet clear.

Major drivers of January inflation

Last month’s inflation was driven by the furnishings, household equipment division which recorded an inflation rate of 71.7 per cent.

This was followed by housing, water, electricity, gas and other fuels (71.1 per cent); transport (68.8 per cent); personal care, social protection, and miscellaneous services (63.1 per cent); food and non-alcoholic beverages (61 per cent).

The rest are clothing and footwear (43.5 per cent); alcoholic beverages, tobacco & narcotics (43.3 per cent); recreation and culture (41.6 per cent); health (35 per cent); information and communication (22.9 per cent); insurance and financial services (11.7 per cent); and education (10.8 per cent).

The restaurant and accommodation services division recorded the lowest inflation rate of 9.6 per cent.

Food inflation

Food inflation also increased from 59.7 per cent in December to 61 per cent in January, while non-food inflation dropped from 49.9 per cent in December to 47.9 per cent.

Inflation for locally produced items also dropped from 51.1 per cent to 50 per cent, while that of imported items also increased from 61.9 per cent to 62.5 per cent.

The food inflation of 61 per cent was driven by fruit and vegetable juices (88.3 per cent).

This was followed by milk, other dairy products and eggs (85.6 per cent); water (80.3 per cent); sugar, confectionery and desserts (78.5 per cent); tea, mate and other plant products for infusion (78.5 per cent); cereals and cereal products (76.2 per cent); fish and other seafood (67.3 per cent); and ready-made food (63.7 per cent).

Others are live animals and meat (63.1 per cent); oils and fats (61 per cent); fruits and nuts (53.5 per cent); soft drinks (53.4 per cent); coffee and coffee substitutes (51.9 per cent); vegetables, tubers, and pulses (34.5 per cent); and cocoa drinks (26.1 per cent).

Regional inflation

The Eastern Region (66.2 per cent) emerged as the region with the highest inflation in January.

This was followed by Greater Accra (65 per cent); Bono (59.6 per cent); Western North (59 per cent); Central (57.5 per cent); Savannah (55.1 per cent); Bono East (51.8 per cent); and Oti (51 per cent).

The rest are North East (49.9 per cent); Ahafo (48.3 per cent); Western (46.7 per cent); Ashanti (44.7 per cent); Northern (44 per cent); Upper East (43.7 per cent); and Upper West (40.5 per cent).

The Volta region recorded the lowest inflation rate of 34.7 per cent.

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