Inflation Rate Rises to 11.4% in July

The consumer price index picked-up in July after briefly posting a marginal decline last month. The inflation rate for July climbed to 11.4% from 11.2% in June as food continued to contribute over 50% to the national inflation. Year-on-year, the rate of inflation rose by 200 basis points (bps) from 9.4% recorded last year.

Data released by the Ghana Statistical Service (GSS) indicated that the uptick in the consumer price reading came on the back of price increases in non-food inflation items after the contribution of transport went up following the upward review in transport fares coupled with price hikes in petroleum products.

The rate of inflation on the Food and non-alcoholic beverages group slowed for the second consecutive time to 13.7% in July from 13.8% in June as prices on food items appeared to be increasing at pre-COVID-19 levels again. Two subgroup items including ‘vegetables’ at 28.2% recorded rates higher than the group’s average inflation rate. Thirteen subgroup items including ‘water’ at 0.7% recorded rates below the group’s average inflation rate.

The inflation rate on non-food and alcoholic beverages category recorded its fourth consecutive rise as it jumped to 9.7% from 9.2% in June. ‘Housing, water, electricity & gas’ at 20.3% was the only subgroup item that recorded a rate higher than the group’s average rate. ‘Insurance and financial services’ at 2.7% 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 16.2% while the Upper West region recorded the lowest at a rate of 5.8%. Inflation on local and imported goods both rose from last month’s figures to 14.1% and 5.1% respectively.

At the last monetary policy committee of the Bank of Ghana, the committee stayed the policy rate at 14.5% for the second consecutive time as the current extraordinary circumstances required some monetary restraint to preserve the anchors of macroeconomic stability.