June Inflation Rate Slows to 11.2%

The rate of inflation eased marginally to close the first half of the year at 11.2% after jumping to a two-year high in May at 11.3%. This represents a 210 basis points jump from the rate of inflation recorded over the same period last year.

The marginal decline, according to data released by the Ghana Statistical Service (GSS), comes on the back of a gradual easing in the prices of some foodstuffs which expunged price hikes in rents and utilities. Food, however, persisted as the major contributor to national inflation after accounting for 54.4% of the consumer price index in June.

The rate of inflation on the Food and non-alcoholic beverages group slowed to 13.8% in June from 15.1% in May as ‘water’, ‘coffee’ and ‘fruits’ posted significant price declines. Three subgroup items including ‘vegetables’ at 28.8% recorded rates higher than the group’s average inflation rate. Twelve subgroup items including ‘water’ at -0.1% recorded rates below the group’s average inflation rate.

The inflation rate on non-food and alcoholic beverages category rose for the third consecutive time to 9.2% in June from 8.4% in May. ‘Housing, water, electricity & gas’ at 21.3% was the only subgroup that recorded a rate higher than the group’s average rate. ‘Insurance and financial services’ at 3.5% was 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 15.0% while the Upper West region recorded the lowest at a rate of 4.3%. Inflation on local and imported goods both declined from last month’s figures to 13.9% and 4.7% respectively.

As the monetary policy committee of the Bank of Ghana meets later in the month, expectations of higher inflation rates as the Cedi continues to remain under pressure coupled with the recent hike in transportation prices is likely to force a monetary policy rate stay.