Inflation Rate Hits Double-Digit

After months of trending in the single digits, the inflation rate in September nudged up above the upper bound of the central bank’s medium-term inflation target band of 8.0% ± 2.0% for the first time since March, 2021. September’s inflation rate was reported at 10.6%, up from 9.7% in August as the Cedi’s depreciation coupled with the upward price adjustments in petroleum products continue to mount pressures on consumer goods and services. On a year-on-year basis, the inflation rate strengthened by 20 basis points (bps), the first rise over the past 6 months.

According to data released by the Ghana Statistical Service, food’s contribution to the national inflation figure slowed for the first time in 4 months to 48.6% as the contribution of housing and utilities rose significantly to exert an upward pressure on the inflation rate. The data also revealed that inflation in the traditionally low inflation zones of the northern regions continues to soar on the back of poor harvest resulting from flooding.

Food inflation rose for the third consecutive time to 11.5% in September, up from 10.9% in August. Seven sub-group items including cocoa drinks recorded figures higher than the group’s average inflation rate whilst fruits and nuts together with some six others recorded figures lower than the group’s average.

Non-food and alcoholic beverages registered its biggest jump in 2021 as it climbed from 8.7% in August to 9.9% in September buoyed by rising prices of transport and housing & utilities. Ten out of the twelve sub-group inflation items recorded rates lower than the group’s average inflation rate.

Across the regions, the inflation rate ranged from 2.7% in the Eastern region to 16.8% in the Upper West region. Inflation on locally produced goods rose further to 11.5% from 10.3% in August whilst that on the imported goods remained unchanged at 8.1%.

Renewed risks to the inflation outlook is expected to be on top of the agenda ahead of the last monetary policy rate decision in November after the inflation rate rose above the inflation target band.