August Inflation Dips to 10.5%

The rate of inflation inched downwards towards the Bank of Ghana (BoG) medium-term inflation target band of 8.0% ± 2.0% as prices pressures on some food items began to ease. According to the Ghana Statistical Service (GSS), August’s inflation rate declined by 90 basis points (bps) to 10.5% from 11.4% recorded in July. Year-on-year, the inflation rate strengthened by 270 bps from 7.8% recorded over the same period last year.

The drop, according to the GSS, came on the back of a lower contribution to the total year-on-year inflation by food items. Food and non-alcoholic inflation items contributed 47.9% to the national inflation rate compared to 53.0% in July.

The rate of inflation on the Food and non-alcoholic beverages group weakened for the third consecutive time to 11.4% in August from 13.7% in July as prices on food items dipped towards pre-COVID levels. Three subgroup items including ‘vegetables’ at 21.3% recorded rates higher than the group’s average inflation rate. Twelve subgroup items including ‘water’ at -0.8% recorded rates below the group’s average inflation rate.

The inflation rate on non-food and alcoholic beverages category extended its upward trajectory for the fifth consecutive time to 9.9% from 9.7% in July. ‘Housing, water, electricity & gas’ at 20.8% 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 13.6% while the Volta region recorded the lowest at a rate of 4.7%. Inflation on local and imported goods both declined from last month’s figures to 12.6% and 4.8% respectively.

As the Monetary Policy Committee of the BoG meets later in the month, it is expected that signs of slowing consumer prices will enable the committee to continue its policy easing stance.