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Inflation Rate Dips to a Single Digit

The consumer price index dipped for the fourth consecutive time buoyed by slowing down prices of food items. The rate of inflation in November fell into the Bank of Ghana’s medium-term inflation target band of 8.0% ± 2.0% for the first time since March, 2020. Data released by the Ghana Statistical Service (GSS) showed that the inflation rate declined to 9.8% in November from 12.6% in October.

According to the GSS, although non-food inflation items remained largely unchanged from the October numbers, the decline in the national inflation figure for November was driven by reductions in the prices of locally produced food items. Food, however, remained as the predominant driver of year-on-year inflation after it contributed 53.0% to the total inflation.

The rate of inflation for Food and non-alcoholic beverages group resumed its downward trajectory in November after briefly climbing in October. It dipped to 11.7% from 12.6% in October as ‘vegetables, tubers, & plantain’ posted the biggest month-on-month decline from 24.9% to 19.5% in November. ‘Fruits & nuts’ at 21.7% were among three other food items that recorded rates higher than the group’s average inflation.

The non-food and alcoholic beverages category remained unchanged at 8.3% between October and November. ‘Housing, water, electricity & gas’ at 21% was the only subgroup item with a rate higher than the group’s average rate. ‘Insurance and financial services’ at 2.1% was among ten others that recorded rates below the group’s inflation figure.

Across the regions, the Greater Accra recorded the highest inflation with a rate of 15.2% while the Volta recorded the lowest at a rate of 3.4%. Inflation on locally produced goods further eased down to 11.5% from 12.2% in November whilst that on imported goods climbed to 5.6%.

The gradual easing of consumer prices is not expected to significantly affect the position of the monetary policy committee of the central bank in the near term as the government is still faced with tight budget constraints coupled with uncertainties imposed by the pandemic.

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