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Inflation drops to single digit in November; first time since COVID-19 shock

BY: Charles Andoh
Prof. Samuel Annim

For the first time since the COVID-19 pandemic, the year-on-year inflation has fallen below 10 per cent to 9.8 per cent in November 2020, according to the Ghana Statistical Service (GSS).

The rate represents a 0.3 percentage point decrease in consumer inflation which measures the average change in the general price levels of goods and services over a period of time and measured by the Consumer Price Index (CPI), relative to the 10.1 per cent recorded in October 2020.

The Government Statistician, Professor Samuel Annim, who announced this in Accra yesterday, said the national month-on-month inflation from October 2020 to November 2020 was 0.3 per cent, slowing down for the fourth consecutive month post-coronavirus (COVID-19), leading to a single digit for the month under review.

Two of the 13 divisions had higher than average inflation rates; ‘housing, water, electricity, gas’ (21.0 per cent, up from 20.2 per cent recorded last month), and ‘food and non-alcoholic beverages’ (11.7 per cent down from 12.6 per cent last month).

Regional inflation

At the regional level, the overall year-on-year inflation ranged from 3.4 per cent in the Upper West and Volta regions to 15.2 per cent in the Greater Accra Region.

The Greater Accra Region is the only region that recorded a food inflation rate of over 8 per cent (13.7 per cent).

The difference between food (13.7 per cent) and non-food (16.2 per cent) inflation was just 2.5 percentage points, while in the Ashanti Region, the difference was 9.4 percentage points (5.7 per cent compared to 15.1 per cent).

Food contributed 53.0 per cent to the total inflation and thus, it is still the predominant driver of year-on-year inflation.

Within the food division, fruits and nuts, representing 21.7 per cent was the subclass with the highest rates of inflation, followed by vegetables, representing 19.5 per cent.

In contrast to food inflation, non-food inflation did not change, compared to last month, with the year-on-year rate standing at 8.3 per cent.

Prof. Annim said the ‘Housing, Water, Electricity, and Gas’ subclass contributed 22.6 per cent to the total inflation, being the highest contribution of the division since the rebasing in August 2019.

Imported goods

The inflation of imported goods was 5.6 per cent while that of local goods was 11.5 per cent on average.

Meanwhile, the month-on-month inflation for both imported goods and local goods was 0.4 per cent.

The main contributor to local month-on-month inflation was the reduction of prices of locally produced food items.

Food items had an average year-on-year inflation of 12.0 per cent and non-food items, an inflation rate of 9.2 per cent.

Imported food items had a month-on-month inflation rate of 0.8 per cent, while non-food imported items had an inflation rate of 0.3 per cent.