Ghana’s Inflation Rate Hits 19% In January

Ghana Statistical Service has announced on Wednesday, in a news conference that Ghana’s annual consumer price inflation rose to 19.0 percent in January from 17.7 percent the month before on utility and fuel price hikes, showing a monthly change rate of 4.6%.

This is the highest the country has recorded in six years, after a similar rate of 19.6% in August 2009.

The monthly change rate in January 2016 was 4.6 percent compared to 1.1 percent recorded in December 2015. This means that the general price level went up by 4.6 percent between December 2015 and January 2016.

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The food inflation rate for January 2016 was 8.2 percent compared to 8.0 percent recorded in December 2015 while the non-food inflation rate for January 2016 was 25.5 percent compared to 23.3 percent recorded in December 2015.

Deputy Government Statistician Baah Wadieh while clarifying the figures explained that the main “price drivers” for the non-food inflation rate were housing, water, electricity, gas and other fuels, contributing about 45.5 per cent, while transport added 30.8 per cent.

“The ‘price drivers’ for the food inflation rate were coffee, tea and cocoa, mineral water, soft drinks, fruit and vegetable juices, sugar, jam, honey, chocolate and confectionery, food products and vegetables,” he added.

“The non-food inflation rate of 25. percent is more than three times, higher than the food inflation rate of 8.2 percent,” he added.

On imported items, he stated that the inflation rate was 18.7 per cent in January 2016, compared with 18.3 percent in December, while that of locally produced items was 19.1 per cent.

On regional basis, two Regions (Ashanti and Greater Accra) recorded inflation rates higher than the national average of 19.0 per cent. The Greater Accra Region recorded the highest year-on-year inflation rate of 23.1 per cent, while the Upper East Region recorded the lowest of 14.1 per cent.

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Ghana’s utility regulator approved a 59.2 percent increase in electricity tariffs in December and an 89 percent rise in water charges, to increase competition in the sector and as part of a plan to stabilize the economy.

Oil marketing companies also pegged ex-pump prices at 27 per cent in January, stimulating upward adjustment in public transport costs by 15 percent.

Before the increases in electricity and water tariffs, Ghana Statistical Service boss Philomena Nyarko had warned that they would have a negative impact on inflation.

Government is implementing a three-year aid programme with the International Monetary Fund (IMF) in an attempt to restore macro-economic balance in the face of problems including inflation persistently above target.

The IMF and the central bank estimate that inflation will peak before slowing to around 10 percent at the end of the year, but analysts say January’s rise could make it hard to meet this target.

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