...As May inflation falls to 8.90%
By Fred SARPONG
Ghana’s inflation rate has dropped consistently for the third time in 2011, reaching 8.90% in May 2011 rekindling hopes that the Mills administration will meet its average inflation target of 8.8% as well as end-period inflation target of 8.5% for this year.
However, industry players, including Bank of Ghana (BoG) have indicated that inflation the pattern for 2011 is expected to go downwards, predicting 9.0% for end of year inflation for 2011.
If inflation continues to decline at the rate which it has, on average since the beginning of the year, government would also achieve, and indeed exceed, its end-period inflation target of 8.5% for 2011.
However, a continued decline is far from certain, while food inflation which is already the driving force behind the on-going decline in inflation can be expected to fall even faster during the second half of the year, following the main food harvest. But supply and demand factors are likely to drive international oil prices higher which in turn would exert significant upward pressure on domestic prices through higher energy costs.
The May 2011 inflation rate was lower 8.90%, recording 0.12 percentage points lower than that of April which was 9.02%.
The downward trend in inflation can be attributed more to both the food and non-alcoholic beverages group than the non-food group.
The food and non-alcoholic beverages group has been recording single digit inflation rates and declining since January 2010, while non-food rate which has been recording double digit inflation, declined from January 2010 to December 2010 and thereafter rising slowly.
The non-food group with a weight of 55.09% has major influence on overall rate of inflation. In May 2011, there was an appreciable inflation rate in the transport sector with the rate of 22.59%; miscellaneous goods and services with 16.68%; and housing, water, electricity, gas and other with 14.47%. The average May non-food inflation rate was 12.15%.
In the food group, which has a weight of 44.91%, sub groups with the highest inflation rates are sugar, jam, honey, syrups, chocolate and confectionary 14.66%; oil and fats 13.85%, fruit 13.51% and coffee, tea and cocoa 12.44%. The average May food inflation rate was 3.93%.
On regional basis, five regions, namely Northern Region (4.15%), Volta (5.22%), Brong Ahafo (7.44%), Eastern (7.49%), and Ashanti region (7.73%), recorded average inflation rates below the national average of 8.90% in May 2011. The Greater Accra (12.23%), Central (10.83%), Upper East and Upper West (10.43%), and Western (10.22%) regions recorded the highest average inflation rates above the national figure of 8.90%.
The rate of inflation has fallen continuously over an 18 month period from 20.74% in June 2009 to 8.58% in December 2010, and has remained relatively stable since June 2010 with inflation rates within 8.58% and 9.52%.
There was a change in the trend as the rate inched up by 0.5 and 0.08 percentage points in January and February 2011 respectively. April inflation declined by 0.11 percentage points and further declined by 0.12 points in May 2011.
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By Fred SARPONG
Ghana’s inflation rate has dropped consistently for the third time in 2011, reaching 8.90% in May 2011 rekindling hopes that the Mills administration will meet its average inflation target of 8.8% as well as end-period inflation target of 8.5% for this year.
However, industry players, including Bank of Ghana (BoG) have indicated that inflation the pattern for 2011 is expected to go downwards, predicting 9.0% for end of year inflation for 2011.
If inflation continues to decline at the rate which it has, on average since the beginning of the year, government would also achieve, and indeed exceed, its end-period inflation target of 8.5% for 2011.
However, a continued decline is far from certain, while food inflation which is already the driving force behind the on-going decline in inflation can be expected to fall even faster during the second half of the year, following the main food harvest. But supply and demand factors are likely to drive international oil prices higher which in turn would exert significant upward pressure on domestic prices through higher energy costs.
The May 2011 inflation rate was lower 8.90%, recording 0.12 percentage points lower than that of April which was 9.02%.
The downward trend in inflation can be attributed more to both the food and non-alcoholic beverages group than the non-food group.
The food and non-alcoholic beverages group has been recording single digit inflation rates and declining since January 2010, while non-food rate which has been recording double digit inflation, declined from January 2010 to December 2010 and thereafter rising slowly.
The non-food group with a weight of 55.09% has major influence on overall rate of inflation. In May 2011, there was an appreciable inflation rate in the transport sector with the rate of 22.59%; miscellaneous goods and services with 16.68%; and housing, water, electricity, gas and other with 14.47%. The average May non-food inflation rate was 12.15%.
In the food group, which has a weight of 44.91%, sub groups with the highest inflation rates are sugar, jam, honey, syrups, chocolate and confectionary 14.66%; oil and fats 13.85%, fruit 13.51% and coffee, tea and cocoa 12.44%. The average May food inflation rate was 3.93%.
On regional basis, five regions, namely Northern Region (4.15%), Volta (5.22%), Brong Ahafo (7.44%), Eastern (7.49%), and Ashanti region (7.73%), recorded average inflation rates below the national average of 8.90% in May 2011. The Greater Accra (12.23%), Central (10.83%), Upper East and Upper West (10.43%), and Western (10.22%) regions recorded the highest average inflation rates above the national figure of 8.90%.
The rate of inflation has fallen continuously over an 18 month period from 20.74% in June 2009 to 8.58% in December 2010, and has remained relatively stable since June 2010 with inflation rates within 8.58% and 9.52%.
There was a change in the trend as the rate inched up by 0.5 and 0.08 percentage points in January and February 2011 respectively. April inflation declined by 0.11 percentage points and further declined by 0.12 points in May 2011.
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