The rate of inflation inched into the single digits for the first time since Ghana’s economy was impacted by COVID related incidences. The inflation rate was reported at 8.5% in April, down from 10.3% recorded last month. This compares with an inflation rate of 10.6% recorded over the same period last year.
The drastic fall in the year-on-year inflation came on the back of the normalization of the economy as economic activities stabilized compared to same period last year when lock-down restrictions contributed to a hike in the prices of some food stuffs.
The rate of inflation on food and non-alcoholic beverages fell for the third consecutive time this year. It dipped from 10.8% in March to 6.5% in April. 7 sub-group inflation items including ‘Tea and other plant products’ at 15.5% recorded rates above the group’s inflation rate.
Inflation rate on non-food and alcoholic beverages on the other hand rose for the third consecutive time this year as price increases in housing, building materials, and utilities continue to mount upward pressures on national inflation figures. Inflation on non-food items climbed to 10.2% in April from 10.0% in March. ‘Housing & utilities’ at 25.0% was the only sub-group item that recorded a rate above the group’s inflation rate.
Across the regions, Greater Accra recorded the highest inflation with a rate of 12.1% while Upper West recorded the least at a rate of 2.0%. Inflation on local goods fell to a single digit at 8.7% for the first time in 2021 from 11.7% recorded last month. Inflation on imported goods soared for the third consecutive time this year from 6.8% in March to 7.4% in April.
As the Monetary Policy Committee of the central bank meets later in the month to discuss the health of the local economy in order to position the policy rate to guide policy decisions, it is expected that the decline in the recent inflation reading will not constitute sufficient basis to lower the policy rate. The MPC will therefore be expected to adopt a ‘wait and see’ approach.
