Sunday, 17 February 2019

January inflation rate drops slightly

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Adnan Adams Mohammed

Ghana’s inflation rate for January, 2019 drops slightly by 0.4 percent to record lowest rate of change of 9.0 percent last January, from 9.4 percent recorded in December, 2018. 

Both food and non-food inflation rates from the data dropped marginally contributing to the fall in inflation.
The Acting government statistician, David Kombat revealed at a press briefing in Accra, last week.
The food inflation rate for January 2019 was 8 percent compared to 8.7 percent recorded in December 2018. The non-food inflation rate January 2019 was 9.5 percent, compared to 9.8 percent recorded in December 2018.

The new inflation rate means that, the level of price of goods and services in the country increased at the lowest rate since January 2013.

“It is good to hear the new rate of inflation is 9.0%, we can say it is the lowest since 2013, but the sustainability of it and the reflection in the general economy must be of concern,”  according to Professor John Gatsi, an economist

“Inflation should be a reflection of other key indicators of the economy, especially, the exchange rate. We know the exchange rate volatility over time contribute to price development in the country and that is what we see in real term. We need to question for a situation where we continue to experience exchange rate rise or the weakening of the Ghana Cedi against the US dollar (a major trading currency) but inflation rate keeps dropping.” Prof Gatsi, the Head of Finance Department of University of Cape Coast expressed in an interview.

The Cedi is currently trading against the US dollar at GHC5.26 as at February 13, the highest price ever, after it jumped from GHC4.90 as at December 31, 2018.
   
This shows an inverse relation between the inflation rate and exchange rate. This is abnormal situation of the key economic indicators. 

Meanwhile, Acting Government Statistician explained further that, the food and non-alcoholic beverages group recorded a year-on-year inflation rate of 8 percent being a 0.7 percentage point lower than the rate recorded in December 2018. The key pushers for the food inflation rate were coffee, tea and cocoa (12.4%), fruits (10%), meat and meat products (9.8%), mineral water, soft drinks, fruit and vegetable juices (9.3%).

The key pushers for the non-food inflation rate include transport (13.4%), clothing and footwear (12.8%), recreation and culture (12.7%), furnishing, household equipment and routine maintenance (11.2%) and miscellaneous goods and services (9.6%).

Mr. Kombat said the GSS was working with the Ministry for Regional Reorganisation and Development to get the needed data, in order to calculate inflation figures for the newly created regions observing such figures will be made available in the medium to long term.

According to him, the statistical service operatives will be watching out for population figures and maps of the new regions to be able to calculate their inflation rates adding; “those with one market centre will have more market centres created so that the exact calculations can be made.”


At the regional level four regions (Upper West, Brong Ahafo, Western and Ashanti) recorded inflation rates above the national average of 9.0 percent. Upper West region recorded the highest year-on-year inflation rate of 10.8%, followed by Brong Ahafo region (9.9%), while the Upper East region recorded the lowest year-on-year inflation rate (7.7%) in January 2019.

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