Statistics released by the Ghana Statistical Service (GSS) revealed that Ghana’s inflation for the month of August, 2015 declined to 17.3% as against 17.9% in July 2015.
This represents a fall of 0.6 percentage points from the inflation rate for July this year.
The dropped in the inflation rate for August, 2015 is the first time since 2010.
The upward inflationary trend in the country’s inflation in the first six months of this year was a continuation of the surge in the rate of inflation which started five years ago.
The trend observed in the first six months of 2015 is similar to that of the same period in 2014. However, the slight decline in the rate in August 2015 is deviation from the sharp rise observed in January 2014.
Economists hold the view that September’s inflation is going to be up, because of the likely hike in the prices of fuel which will automatically affect the prices of goods and services in the country.
The major contributors to the decline of the August inflation rate are: the food group and the non-food group.
The contribution of a group or sub-group to the overall rate of inflation depends on the magnitude of price change for items within and the weight of the group in the Consumer Price Index (CPI) basket of goods and services. The weight reflects the level of consumers’ utilization of items in the group.
The food inflation rate for August 2015 was 7.7% as against 7.6% recorded in July 2015. Economists attributed the drop in this group of the basket to the bumper harvest recorded in the country.
The non-food inflation rate for August 2015 was 23.4% compared with 24.6% recorded in July 2015, while the inflation rate for imported items was 18.1% in August 2015 compared with 21.2% recorded in July 2015.
The inflation rate for locally produced items was 17.0% in August 2015 same as the rate recorded in July 2015.
The main price drivers for the non-food inflation rate were Recreation and culture (25.8%), Education (25.6%), Transport (25.3%), Clothing and Footwear (25.1%), Furnishings, household equipment and routine maintenance (24.9%) and Housing, water, electricity, gas and other fuels (23.5%).
The price drivers for the food inflation rate were mineral water, soft drinks, fruit and vegetable juices (13.5%), Coffee, tea and cocoa (12.9%), Sugar, jam, honey, chocolate and confectionery (11.7%), Food products (11.4%), Meat and meat products (11.2%), Vegetables (10.9%) and Milk, cheese and eggs (10.0%).
Geographically, three regions namely, Ashanti, Greater Accra and Central regions recorded inflation rates higher than the national average of 17.3%.
Upper West Region recorded the same inflation rate as the national average of 17.3 percent.
The Ashanti Region recorded the highest year-on-year inflation rate of 18.9% while the Northern Region recorded the lowest (13.8%).
Instructively, the CPI measures the average percentage change of the general price levels in the country, as experienced by consumers, with reference to the price levels in 2012, which is set to 100 (i.e. 200=100).