Food drives consumer inflation down to 10.5% in August

Consumer inflation for August 2020 declined to 10.5 percent from 11.4 percent in July 2020, data from the Ghana Statistical Services (GSS) has shown.

This is the first decline in consumer inflation since the easing of COVID-19 restrictions. This represents 0.9 percentage points decline in the key economic data.

According to the Government Statistician, Professor Samuel Kobina Annim said, “National year-on-year inflation for August 2020 was 10.5 percent. The month-on-month inflation rate of negative 0.4 percent indicates that prices actually decreased slightly in the last month. This is driven by negative month-on-month food inflation (-1.1 percent). Furthermore, the contribution of food items (47.9 percent) to total year-on-year inflation is lower than previous months and similar to the months prior to COVID-19.”

The Food and Non-Alcoholic Beverages Division recorded a year-on-year inflation rate of 11.4 percent. This is 2.3 percentage point lower than in July 2020 at 13.7 percent. Within the Food Division, Vegetables, which recorded 21.3 percent and Fish and Other Seafood at 14.3 percent were the Subclasses with the highest rates of inflation.

“In August 2020, food contributed 47.9 percent to the total inflation and thus is still the predominant driver of year-on-year inflation. This percentage is lower than the previous months and comparable to the contribution levels of Food to total inflation prior to COVID-19,” Professor Annim said.

Year-on-year Non-Food inflation came in at 9.9 percent, which is higher than the 9.7 percent measured in July 2020. With the exception of the Alcoholic Beverages, Tobacco and Narcotics and the Restaurant and Accommodation Services Divisions, overall Ghana recorded a lower month-on-month inflation in August than on average between April and July 2020

Imported and Local Inflation

The inflation of imported goods was 4.8 percent, while the inflation of local goods was 12.6 percent on average. The main contributor to negative local inflation was the inflation of locally produced foods.

Regional Inflation

At the regional level, the overall year-on-year inflation ranged from 4.7 percent in the Volta Region to 13.6 percent in Greater Accra.

“When separating inflation in Food and Non-Food inflation, it is clear that Greater Accra had a lower Food inflation (8.1 percent) than Non-Food inflation (17.5 percent). In contrast, Ashanti Region recorded the highest Food inflation (20.3 percent), but a relatively low Non-Food inflation (4.8 percent),” the Government Statistician said.