Rising inflation rate continues

The headline inflation rate rose to 16.8 percent in April 2015 from 16.6 the previous month, due to rising utility and fuel cost, the Ghana Statistical Service has said.

The jump in the rate, which represents 0.2 percentage points, shows the upward trend since the beginning of 2015 as depreciation of the local currency continues to push import prices up.

Compared to April 2014, housing, water, electricity, gas and other fuel prices rose 25.0 percent -- pushing up non-food products cost to 23.2 percent from 23.1 percent in March,while food prices increased by 7.2 percent.

Dr. Philomena Nyarko, the Government Statistician speaking at a media interaction in Accra, explained that the food and non-alcoholic beverages group recorded a year-on-year rate of 7.2 percent, adding: “This is the same as the food and non-alcoholic beverages group recording inflation rates higher than the group’s average rate of 7.2 percent”.

Dr. Nyarko said the non-food group recorded a year-on-year inflation rate of 23.2 percent in April 2015, compared to 23.1 percent recorded for March 2015.

She said three sub-groups recorded year-on-year inflation rates higher than the group’s average rate of 23.2 percent.

She said housing, water, electricity, gas and other fuels recorded the highest rate of 25.0 percent, followed by transport, clothing and footwear with 24.5 percent and 23.7 percent respectively.

The monthly change rate for April 2015 was 1.8 percent compared to the 1.0 percent recorded for March 2015.

The Public Utilities Regulatory Commission (PURC), in spite of the erratic supply of electricity, last month announced its plans to increase power tariffs by 2.63 percent while the water tariff will be increased by 1.06 percent, effective April 1, 2015.

According to the PURC in a press statement, in calculating the tariffs for the second quarter’s Automatic Adjustment Formula it arrived at an actual increase of 31.73 percent cumulative for electricity and 21.30 for water; but using the decision variable, it decided to pass on a minimal tariff increase.

The weak cedi has also contributed to the high rate of inflation this year, with the currency losing developments in the foreign exchange market, indicated a further weakening of the domestic currency in 2015.

According to a report from the Bank of Ghana’s Monetary Policy Committee, from January to May 8, 2015 the cedi cumulatively depreciated by 17.2 percent against the US dollar compared with 21.3 percent recorded in the same period in 2014.

On the regional inflation dynamics, Dr.Nyarko said inflation is lowest in the communications sub-group of 13.0 percent.

At the regional level, she said, the year-on-year inflation rate ranges from 14.1 percent in the Eastern Region to 18.9 percent in the Central Region.

Three regions, Central, Greater Accra and Ashanti, recorded inflation rates above the national average of 16.8 percent, she noted.