Inflation Rate For March, 2019 Inches up to 9.3%

The consumer price index ended the first quarter of 2019 rising to a 3-month high. The inflation rate for March 2019 was reported at 9.3%, up by 10 basis points (bps) from 9.2% recorded in February after it began the year at a 6-year low. Year-on-year, the rate of inflation fell by 110 bps from a reported rate of 10.4% in March 2018.

The consumer price index has remained in the single digits for the past nine months in line with the government’s medium-term inflation target band of 8.0% ± 2.0%. March’s inflation reading, however, represents a further drift away from the government’s projected end-period inflation target of 8%.

According to data from the Ghana Statistical Service (GSS), the rise came on the back of a pass-through effect of the depreciation of the local currency against its major trading partner currencies as well as an upward price adjustment in petroleum products which fed into prices of food and non-alcoholic beverage items.

The Food and Non-alcoholic beverages group recorded a year-on-year inflation rate of 8.4%, up by 30 bps from a reported rate of 8.1% in February. The main upward price driver in this category was ‘coffee, tea & cocoa’ which rose from 11.6% in February to 13.0% in March. Four sub-groups, including ‘soft drinks & fruits’ at 11.1% were above the group’s inflation rate while seven sub-groups, including ‘cereal products’ at 3.4% posted rates below the group’s inflation rate.

The inflation rate for the non-Food and alcoholic group remained unchanged at 9.7%. The major upward price driver for this group was ‘Recreation & culture’ sub-group which rose from 13.2% in February to 14.1% in March. Four sub-groups, including ‘Transport’ at 13.7% recorded rates higher than the group’s inflation rate and seven other sub-groups, including ‘housing & utilities’ at 2.1% also recorded rates below the group’s inflation rate.

At the regional level, the Upper West region recorded the highest inflation with a rate of 11.5% while the Upper East region recorded the lowest at a rate of 7.9%.

After the Monetary Policy Committee (MPC) of the Bank of Ghana stalled the policy rate at 16.0% on the emergence of risks to the inflation outlook, it is expected that the MPC will continue to take a cautious stance on its policy rate easing cycle going forward.