Inflation Rate Climbs to 10.3% in February

The inflation rate rose above the upper bound of the Bank of Ghana’s medium-term inflation target band of 8.0% ± 2.0% as price pressures begin to pick up following a gradual increase in crude oil prices. According to data released by the Ghana Statistical Service (GSS), the inflation rate gained 40 basis points (bps) in February to climb from 9.9% in January to 10.3%.

The rise in the inflation reading came as pressures on non-food inflation items begin to build up to offset the continued easing in the prices of some food items. The GSS noted in its report that food’s contribution to the national inflation figure declined for the second consecutive time to its lowest since September, 2020.

The rate of inflation on food and non-alcoholic beverages was reported at 12.3% in February, down from 12.8% in January as ‘water’ and ‘fruits’ posted the biggest year-on-year decline from 1.8% and 9.5% to -1.1% and 0.4% respectively. ‘Tea and other plant products for infusion’ at 17.7% was among 5 other sub-group items that recorded rates above the group’s inflation rate.

The inflation rate on non-food and alcoholic beverages, after staying at 7.7% in January, rose 110 bps to 8.8% in February. ‘Housing & utilities’ and ‘insurance & financial services’ registered the biggest year-on-year increases from 6.3% and 0.4% to 21.0% and 7.4% respectively. ‘Housing & utilities’ was the only division that recorded a rate above the group’s inflation figure.

At the regional levels, Greater Accra recorded the highest inflation with a rate of 14.8% while Volta recorded the least at a rate of 4.4%. Inflation on both local and imported goods rose from last month’s reported figures of 11.3% and 6.1% to 11.7% and 6.7% in February respectively.

As risks to the inflation outlook for the rest of the year continue to rise buoyed by a widened fiscal deficit, increases in taxes, and a surge in crude oil prices, it is expected that the monetary policy committee would continue to embark on its cautious stance as it prepares to announce the policy rate later in the month.