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Inflation rate remains high as Ghana battles with COVID-19
Like most economies around the world, the novel coronavirus pandemic has affected price stability in the country.
As the infection rate continues to spike, the economy is witnessing a high inflation rate. Year-on-year inflation rate for June stands at 11.2 percent.
According to the Ghana Statistical Service, the Consumer Price Index (CPI) measures the change over time in the general price level of goods and services that households acquire for consumption, with reference to the price level in 2018, the base year, which has an index of 100.
Food and Non-alcoholic Beverages division recorded the highest year-on-year inflation rate of 13.8% with Housing, Water, Electricity, and Gas recording 21.3%.
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| Table 1.0 Consumer Price Index, August 2019 to June 2020 | |||
| Year-on-year inflation | |||
| Year/Month | Food and non-alcoholic beverages | Non-food | Combined food and non-food |
| Aug-19 | 8.2 | 7.4 | 7.8 |
| Sep-19 | 8.5 | 7 | 7.6 |
| Oct-19 | 7.0 | 8.2 | 7.7 |
| Nov-19 | 8.4 | 8 | 8.2 |
| Dec-19 | 7.2 | 8.5 | 7.9 |
| Jan-20 | 7.8 | 7.9 | 7.8 |
| Feb-20 | 7.9 | 7.7 | 7.8 |
| Mar-20 | 8.4 | 7.4 | 7.8 |
| Apr-20 | 14.4 | 7.7 | 10.6 |
| May-20 | 15.1 | 8.4 | 11.3 |
| Jun-20 | 13.8 | 9.2 | 11.2 |
Source: Ghana Statistical Service
Regionally, Greater Accra recorded the highest year-on-year inflation of 15.0 percent which is up by 1.7 percent while the Upper West Region and Volta Region recorded the lowest year-on-year inflation of 4.3 percent.
All, but the Greater Accra Region, Northern Region, and Upper East Region had food inflation being higher than non-food inflation. Western and Ashanti Region recorded the highest year-on-year inflation of 21.3 percent food inflation compared to 7.4 percent non-food inflation. Whilst the Ashanti Region recorded 20.6 percent food inflation and 5.4 percent non-food inflation.
The overall month-on-month inflation was between -2.2 percent in the Upper West Region and 2.5 percent in Greater Accra. Ashanti Region recorded the highest month-on-month inflation of 3.9% between April and May 2020 but recorded a negative (-0.67 percent) month-on-month inflation between May and June 2020.
| Table 1.1 Month-on-month Inflation Rate (%) | ||
| Region | April-May | May-June |
| Western | 2.99 | 1.60 |
| Central | 1.75 | 0.22 |
| Greater Accra | 0.73 | 2.52 |
| Volta | -1.52 | 1.39 |
| Eastern | 2.07 | 0.30 |
| Ashanti | 3.91 | -0.60 |
| Brong Ahafo | 0.81 | 0.84 |
| Northern | 0.18 | 0.41 |
| Upper East | 1.46 | 2.00 |
| Upper West | 2.66 | -2.16 |
Source: Ghana Statistical Service
Based on the above data, regions with high month-on-month inflation between April and May 2020 like the Greater Accra Region and Ashanti Region recorded lower month-on-month inflation this month, and vice versa.
Available economic data including the recent increase in transport fares indicates prices of goods and services might not decline as quickly as might be expected in the short-term as coronavirus cases continually spike.
Investment in agriculture by both the government and private sector is the surest bet to reduce food prices.
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