Increase in Transport & Food Prices Drive Ghana’s Inflation Rate to 27.6%

If inflation rate continues to rise, then interest rates are expected to climb further.
Increase in Transport and Food Prices Drive Ghana’s Inflation Rate to 27.6%
Increase in Transport and Food Prices Drive Ghana’s Inflation Rate to 27.6%

Increase in Transport & Food Prices Drive Ghana’s Inflation Rate to 27.6% in May as against 23.6% in April, hitting a new 18-year peak.

Government Statistician, Professor Kobina Annim says the rate of inflations for transport about 39.0%, Household Equipment and Maintenance about 33.8%, Housing, Water, Gas and Electricity about 32.3%, and Food and Non-Alcoholic Beverages about 30.1.6% were higher than the national average of 27.6%.

The margins between food and non-food inflation was 4.4 percentage points relative to 5.4 percentage points for March 2022 and 5.3 percentage points for April 2022.

Last month, the MPC hiked interest rate to curb inflation, but it has not achieved the desired result.

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In May 2022, 12 of the 13 divisions record inflation rates higher than the rolling average from June last year to May 2022.

The data revealed that food inflation in May 2022 was 30.1% higher, compared with 26.6% in the preceding month. Non-food Inflation was also 25.7% in May 2022, as against 21.3% the previous month.

The margins between food and non-food inflation was 4.4 percentage points relative to 5.4 percentage points for March 2022 and 5.3 percentage points for April 2022.

Focusing on year-on-year food inflation for May 2022, five sub-classes record inflation rates higher than the overall food inflation of 30.1%, which was distantly led by oils and fats at 52.0% followed by Water at 42.4%.

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The inflation for imported goods was 28.2% in May 2022, higher than the 24.7% recorded in the previous month, while the inflation for locally produced items was 27.3% in May, up from the 23.0% recorded in April 2022.

Meanwhile, Ghana’s eastern region for the first time in a while recorded the highest rate of inflation of 31.2% due to skyrocketing food prices in the region.

However, Upper East region recorded the least inflation rate of 19.5%.

The Greater Accra region recorded an inflation rate of 29.7%, whilst the Ashanti region recorded a lower rate of 27.1%.

If inflation rate continues to rise, then interest rates are expected to climb further.

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Presently, interest rates on the short term of the money market are hovering around 22% plus.


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