Inflation Rate for September Dips to 7.6%

The inflation rate ended the third quarter of the year by declining to 7.6% from 7.8% in August as stable prices of some non-food inflation items normalized the pass-through effects of an upward adjustment in the prices of petroleum products and transport fares. September’s inflation reading is the second after the Ghana Statistical rebased the consumer price index using 2018 as the reference period to accommodate changes in the consumption pattern over time.

The consumer price index is currently well within the government’s end of year target of 8.0% after the dip. The government will be expected to revise downwards the year-end inflation target in its 2020 budget statement as the inflation rate moves to the lower band of the Bank of Ghana’s medium-term inflation target band of 8.0 ± 2.0%

The Food and non-alcoholic beverages group recorded a year-on-year inflation rate of 8.5%, up from 8.2% in August. The key drivers for this category were ‘fruits & nuts’ and ‘coffee products’ which recorded rates of 26.9% and 15.3% respectively. Ten out of 15 sub-groups including ‘water’ at 2.5% recorded rates below the group’s inflation rate.

The inflation rate for the Non-food and alcoholic category fell from 7.4% recorded last month to 7.0%. ‘Alcoholic beverages & other narcotics’ and ‘housing & other utilities’ at 12.2% and 10.0% respectively recorded rates above the group’s inflation rate. Insurance and financial services at 1.1% were among 8 others that recorded rates below the group’s inflation rate.

At the regional level, the Greater Accra region recorded the highest inflation with a rate of 11.8% while Eastern region recorded the lowest at a rate of 3.8%.

Despite the drop in the consumer price index, it is anticipated the Monetary Policy Committee will continue to maintain a cautious stance in its next policy rate announcement as the slow pace of fiscal consolidation coupled with the depreciation of the local currency remains a concern.