Skip to main content

Inflation gets closer to gov’t target

...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.



.

Comments

Popular posts from this blog

Fitch Solutions retains 2025 growth rate projection at 4.2%

 Fitch Solutions has reaffirmed its projection that Ghana’s economy will expand by 4.2% in 2025. This estimate slightly exceeds the International Monetary Fund’s forecast of 4% and the World Bank’s projection of 3.9%. The UK-based research firm attributes its outlook to historically high gold prices, which are expected to cushion the Ghanaian economy against a global slowdown triggered by rising tariffs. Higher gold prices are anticipated to strengthen government revenue, enhance foreign exchange earnings, and help sustain currency stability. The report also highlights that Ghana is relatively less vulnerable to increasing trade restrictions from the United States, given that its primary exports—gold and crude oil—are not directly affected by the tariffs introduced by President Trump’s administration. Moreover, the US constitutes only about 4% to 5% of Ghana’s total exports. In contrast, Ghana’s trade relations are more heavily oriented toward China and European countries, particul...

BoG injects $20m into FX market to support 11 BDCs

  The Bank of Ghana (BoG) has injected $20 million into the foreign exchange market in the latest round of its forward FX auction targeted at Bulk Oil Distribution Companies (BDCs). The intervention, which benefited eleven BDCs, is part of the central bank’s broader strategy to stabilise the cedi and ensure price stability in the petroleum downstream sector. Held on Tuesday, April 29, the auction was priced at a locked exchange rate of GHS 14.28 to the US dollar, with bid offers ranging from GHS 13.85 to GHS 15.55. This move reflects the BoG’s continued effort to deepen forex liquidity and safeguard the domestic fuel supply chain against volatility in global energy markets. By directly supplying FX to BDCs, the central bank seeks to ease pressure on the interbank market, guarantee the uninterrupted flow of petroleum products, and mitigate the pass-through effects of exchange rate fluctuations on fuel prices. The $20 million disbursement forms part of a $120 million programme for th...

Kenpong Travel & Tours Champions Breast Cancer Awareness During Customer Week

  As part of activities to mark Customer Week, Kenpong Travel & Tours, a leading travel agency in Ghana, is joining the global fight against breast cancer. October is Breast Cancer Awareness Month, and the company is passionate about spreading hope and support to those affected. At Kenpong Travel & Tours, we believe that travel and exploration can be therapeutic and empowering. That's why we're committed to supporting our customers and the broader community in the fight against breast cancer. We're proud to stand in solidarity with breast cancer warriors and survivors. At Kenpong Travel & Tours, we believe that everyone deserves a chance to explore the world and create unforgettable memories. Let's prioritize health, support one another, and fight against breast cancer," said Kennedy Agyapong, CEO of Kenpong Travel & Tours. Our efforts are focused on raising awareness, promoting early detection, and supporting those affected by breast cancer. We urg...