Consumer prices further recorded a slight increase in April to post its third consecutive increase this year. After the consumer price index began the year at a six-year low, it has cumulatively hardened by 50 basis points, rising to its highest since October, 2018. The inflation rate for April, 2019 was reported at 9.5%, up by 20 basis points (bps) from 9.3% in March. Year-on-year, the rate of inflation fell by 10 bps from a reported rate of 9.6% in April, 2018.
Although the rate of inflation has been on an upward trajectory in recent times, it has largely remained in the single digits over the past year in line with the government’s medium-term inflation target band of 8.0% ± 2.0%. April’s inflation reading, however, represents a further drift away from the government’s projected end-period inflation target of 8%.
According to data from the Ghana Statistical Service (GSS), the rise came on the back of an upward adjustment in the prices of petroleum products at the pumps which mounted pressure on the non-food and alcoholic beverages category.
The Food and Non-alcoholic beverages group recorded a year-on-year inflation rate of 7.3%, down by 110 bps from a reported rate of 8.4% in March. The main upward price driver in this category was ‘coffee, tea & cocoa’ which rose from 13.0% in March to 13.7% in April. Five sub-groups, including ‘soft drinks & fruits’ at 10.4% were above the group’s inflation rate while six sub-groups, including ‘cereal products’ at 3.9% posted rates below the group’s inflation rate.
The inflation rate for the non-Food and alcoholic group strengthened by 70 bps from 9.7% in March to 10.4% in April. The major upward price driver for this group was ‘Clothing & Footwear’ sub-group which rose from 13.3% in March to 14.3% in April. Four sub-groups, including ‘Recreation & Culture’ at 14.1% recorded rates higher than the group’s inflation rate and seven other sub-groups, including ‘Health’ at 5.9% also recorded rates below the group’s inflation rate.
At the regional level, Upper West region recorded the highest inflation with a rate of 11.5% while Upper East region recorded the lowest at a rate of 8.0%.
After warning that the Monetary Policy Committee (MPC) will not hesitate to take immediate and decisive policy actions including a tighter monetary policy stances at its last meeting, it is expected that the MPC will continue to take a cautious stance on its policy stance as consumer prices continue to mount an upward pressure in its meeting later this month.
