Inflation Rate Closes the First Quarter at 10.3%

The inflation rate remained unchanged from previous month’s levels as upward price pressures continue to keep the inflation rate above the central’s bank’s medium-term inflation target band. According to the latest data released by the Ghana Statistical Service (GSS), the inflation rate ended the first quarter of the year at 10.3%, 250 basis points (bps) above last year’s figure.

The GSS explained that the upward price pressures persisted in March following price increases in some non-food and alcoholic inflation items. Particularly, it was observed that a higher rate was recorded for ‘Housing and utility’ category in the Greater Accra region. This came on the back of increases in rent and cost of building materials.

The inflation on food and non-alcoholic beverages extended its downward trajectory in 2021 as it declined from 12.3% in February to 10.8% in March. ‘Tea and other plant products’ at 16.7% was among 7 other sub-group items that recorded rates above the group’s inflation rate.

The rate of inflation on non-food and alcoholic beverages jumped from 8.8% in February to 10.0% in March after the inflation rate on ‘Housing & utilities’ climbed from 21.0% in February to 29.0% in March. ‘Housing & utilities’ was the only sub-category that recorded a rate above the group’s inflation rate.

Across the regions, Greater Accra recorded the highest inflation with a rate of 17.0% while Volta recorded the least at a rate of 5.3%. Inflation on local goods stayed at 11.7% whilst that on imported goods rose from 6.7% in February to 6.8% in March.

At the last Monetary Policy Committee meeting of the central bank, the committee stalled the prime rate on the back of emerging short-term pressures emanating from rising crude oil prices, although risks to inflation in the near-term remain broadly balanced. The committee is expected to stay on this path until calm has been restored to the inflation outlook.