FLASHBACK: GSS, BoG claim on Russia-Ukraine crisis directly affecting food prices true - Economist

Economist, Courage Martey, corroborated the government's claims that the Russia-Ukraine crisis is a major contributor to the hike in Ghana’s current inflation.

Inflation hit an all-time high of 19.4% in March 2022, the highest since August 2009.

Read the full story originally published on April 19, 2022, by GhanaWeb

Economist, Courage Martey, has indicated that claims by the Ghana Statistical Service that the Russia-Ukraine crisis is a major contributor to the hike in Ghana’s current inflation.

Inflation hit an all-time high of 19.4% in March this year, the highest since August 2009.

The Ghana Statistical Service and the Bank of Ghana have said that this is due to the conflicts between Russia and Ukraine, which are negatively impacting the price of cereals and grains and the supply of fertilizer.

Courage Martey, in a JoyBusiness interview, said, “If you trace the food inflation curve, you notice that it became very steeper since the Russia-Ukraine crisis began.

“Now if you break down food inflation, you will also realize that cooking oil, cereal products, and vegetables, are the main drivers of food inflation and they find their connection to all these imports from Russia so overall the key drivers show our exposure to what is happening in Europe,” he noted.

He stated that food inflation, “…as well as transport operation where you will see global energy prices rising sharply, and it is filtering through to domestic prices, and now transport inflation is the topmost non-food inflation currently. Again, the increases we are seeing in inflation show our exposure to what is happening in geopolitics.”

Inflation hits 19.4%

Inflation for the month of March has been pegged at 19.4%, the highest rate recorded since August 2009.

The rise in inflation will mean that interest rates will continue surging resulting in the rise of the cost of credit.

The Ghana Statistical Service stated that foodstuffs such as Oil and Fats (28.2%), Water (27.1%), Cereal Products (25.0%), Vegetables (23.8%), Fish and Other Seafood (23.7%), Fruits and Nuts (22.1%), Soft Drinks (20.5%) and Live Animals and Meat (20.2%) recorded inflation rate, higher than the national average.

Transport which includes fuel recorded the highest inflation rate of 27.6%, followed by Housing which was 21.4%.

The figures showed that food inflation recorded a rate of 22.4% in March 2022, away from the 17.4% recorded in February 2022.

However, the non-food inflation rate was 17.0% in March 2021, from the 14.5% rate in February 2022.

Also, between February 2022 and March 2022, month-on-month inflation was 4.0%.

Food inflation exceeded non-food inflation by 0.8 percentage points on a month-on-month basis.

Local inflation also shot up to 20% in March 2022, as against 17.3% of imported goods or inflation.

The Bono Ahafo region recorded the highest rate of inflation at 23.3%.

The Upper East region also recorded the lowest rate of inflation at 12.5%.