Inflation Rate Soars to 11.3%

The rate of inflation rose for the second consecutive time in May after maintaining a stable trajectory in the first three months of the year. Latest consumer prices data released by the Ghana Statistical Service (GSS) showed that the rate of inflation inched up by 70 basis points (bps) to 11.3% in May from 10.6% in April.

According to the GSS, the recent sharp rise in the consumer price index comes on the back of hikes in the prices of some foodstuffs. This trend has subsequently cumulated into food being the key driver of year-on-year inflation after it contributed 58.6% to April’s year-on-year inflation figure.

The Food and non-alcoholic beverages group recorded a year-on-year inflation rate of 15.1%, up from 14.4% recorded in April. Three subgroup items including ‘vegetables’ at 34.9% recorded rates higher than the group’s average inflation rate. Twelve subgroup items including “water” at 0.1% recorded rates below the group’s average inflation rate.

The non-food and alcoholic beverages category rose from 7.7% in April to 8.4% in May, its highest since December, 2019. ‘Housing, water, electricity & gas’ at 15.1% was the only subgroup that recorded a rate higher than the group’s average rate. ‘Insurance and financial services’ at 0.2% was among eleven others that recorded rates below the group’s inflation figure.

At the regional level, the Greater Accra region recorded the highest inflation with a rate of 13.3% while the Upper East region recorded the lowest at a rate of 3.1%. The data also showed that inflation on local goods soared to its highest at 14.1% whist that on imported goods fell to its lowest at 4.8%.

Expectations of higher inflation rate caused the Monetary Policy Committee (MPC) of the Bank of Ghana to stall the policy rate at 14.5% at its last meeting in May. The committee, however, noted that it expects the inflation rate to ease in the ensuing quarters.