Consumer prices rose significantly at the start of the second quarter of the year buoyed by increases in the prices of foodstuffs during the partial locked down period. The rate of inflation recorded its first double-digit figure in April since the consumer price index was rebased in August, 2019. According to the Ghana Statistical Service (GSS), inflation rate in April surged to 10.6%, up from 7.8% in March.
Data released by the GSS indicated that the jump came on the back of a hike in the prices of some foodstuffs in the partial locked down areas in the Greater Accra and Ashanti regions. The data further showed that food inflation took over from non-food inflation as the key driver of inflation in April as food contributed to 59.6% of the year-on-year inflation.
The Food and non-alcoholic beverages group recorded a year-on-year inflation rate of 14.4%, up from 8.4% recorded in March as ‘vegetables’ subgroup posted the biggest month-on-month rise from 14.1% in March to 37.0% in April. However, thirteen subgroup items out of a total of fifteen items in the food category recorded rates below the group’s average inflation rate.
As compared to the food inflation category, the non-food and alcoholic beverages category rose marginally from 7.4% in March to 7.7% in April. Only ‘Housing, water, electricity & gas’ subgroup recorded a rate above the group’s average rate at 11.2%. ‘Insurance and financial services’ at 0.1% were among eleven others that recorded rates below the group’s inflation figure.
At the regional level, the Greater Accra region recorded the highest inflation with a rate of 15.1% while the Upper East region recorded the lowest at a rate of 2.3%. Inflation on locally produced items also came at 13.1% as compared to 4.9% for the imported items.
As the Monetary Policy Committee (MPC) of the Bank of Ghana meets later in the month to review recent economic events, it is expected that the MPC will continue to implement measures that will further stimulate the economy to drive production whilst taking into account the recent jump in consumer price readings and a potential disruption to the deflationary trend.