Inflation Rate Climbs to 15.7%

The ongoing hikes in the prices of consumer goods seem to have no end in sight as the latest consumer prices information announced by the Ghana Statistical Service (GSS) revealed that the inflation rate shot up to its highest in more than five years. Data released by the GSS showed the year-on-year inflation rate in February climbed up to 15.7%, up from 13.9% in January as upward price pressures continue to persist.

The surge in the consumer price index for February represents the ninth consecutive rise in the inflation rate which has mainly come on the back of upward adjustment in transport costs, increases in the prices of petroleum products, Cedi depreciation, fiscal slippages, among others. We expect the upward price pressures on consumer goods and services to continue to linger on the back of the sharp depreciation of the local unit against most of its international trading partner currencies amid the impact of the Russian-Ukrainian war on crude oil prices.

Food inflation recorded a significant jump of 3.7 percentage points from 13.7% in January to 17.4% in February. On a month-on-month basis, food and non-alcoholic beverages rose to 3.2% as all the 15 items in this category recorded higher inflation figures in February compared to last month.

On a month-on-month basis, non-food and alcoholic beverages recorded a slower inflation rate of 1.6% in February compared to 2.2% printed in January. Its annual inflation rate similarly rose marginally from 14.1% in January to 14.5% in February. This was after Housing, water, electricity, gas & other fuels and Insurance & financial services categories printed inflation figures lower than the figures recorded in January.

Across the regions, the inflation rate hovered between 11.6% in the Western region to 19.5% in the Greater Accra region. Inflation rates on both local and imported goods recorded an uptick from 15.0% and 11.0% in January to 16.7% and 12.9% in February respectively.

The Monetary Policy Committee of the central bank meets later in the month where pressure is mounting on them to deliver the first policy rate hike in 2022 on the back of the inflation rate firming above the upper band of the medium-term inflation target band.