Inflation Hits Ever Highest Level since Rebasing

Efforts embarked upon by both the monetary and fiscal authorities to cool-off the persistent rise in consumer prices yielded little result as the inflation rate soared for the sixth consecutive time in November to its highest in more than four years. The inflation rate rose from 11.0% in October to print at 12.2% in November, surpassing rates recorded in the heat of the pandemic.

The persistent and sustained rise in consumer prices over the past few months has come on the back of the recent spike in global energy cost, the weakening of the local currency, an increase in economic activities as well as fiscal slippages. Data released by the Ghana Statistical Service revealed that both food and non-food inflation groups recorded increases, signaling a broad-based inflationary environment. The inflation rate will be expected to further heat up in December following the elevated economic activities likely to climax the yuletide.

After a brief decline last month, food inflation picked up steam in November as it strengthened by 2.1 percentage points to 13.1%, with its contribution to the national rate rising from 44.9% in October to 47.7%. Oils & fats at 18.1% and Ready-made foods at 18.0% were among five other subgroup items with rates higher than the group’s average inflation rate.

Housing & utilities and Transport drove the increase in non-food inflation items as the inflation rate on non-food and alcoholic beverages climbed for the fifth consecutive time to top 11.6% in November. The inflation rate on Housing & utilities and Transport came in at 20.5% and 16.0% respectively.

Across the regions, the inflation rate hinged from 2.7% in the Eastern region to 17.2% in the Upper West region. Locally produced goods and imported goods recorded increases from last month’s levels. Local goods printed at 13.0% whilst that of imported goods came in at 9.8%.

The ongoing inflationary trend poses major risks to the policy normalization agenda as rates slowly pick up. Last month, the Monetary Policy Committee handed down its first rate hike in more than 5 years in a bid to re-anchor inflation expectations to safeguard the central bank’s price stability objective. The central bank will be expected to remain on a cautious stance in 2022 as the risks to the inflation outlooks continue to linger.