June inflation hits 20.74 %

Annual inflation rate rose to 20.74 percent in June, up from 20.06 percent in May, reversing the slight drop enjoyed.

The change represents a rise of 0.68 percentage points in the Consumer Price Index (CPI). This is well above the 2008 peak of 18.4 percent recorded in June.

The increasing trend in the cost of transport contributed to the change in the current CPI.

Official figures released by Ghana Statistical Services (GSS) indicated that the non-food component of the consumer index contributed 24.66 percent to the inflation rate with high prices of recreation and culture, health and alcoholic beverages, as well as hotels, cafes and restaurants, being responsible for the change of the CPI - making them the major contributors within the non-food group.

Within the food group, mineral water, soft drinks and juice, vegetables and fruit also accounted for the highest upward movement in the national index.

Dr. Grace Bediako, Government Statistician, briefing the media explained that the negative effects of the 30 percent petroleum price adjustment caused the surge.She expressed the hope that with availability of more foodstuffs on the market, the annual rate of inflation might come down.

A further fall in the inflationary trend could result in government attaining its projected end of year 12.8 percent inflationary target.

However, analysts have predicted an increasing inflationary outlook on the economy, emphasising that the sensitivity of the economy to global commodity price developments and fiscal concerns are likely to worsen inflation expectations in the coming months.

Due to these factors, inflation is likely to close the ensuing quarter above 20.0 percent.

On policy outlook and financial market implications, experts suggested an urgent formulation of fiscal policies and directions to combat the increasing trend.

Four regions recorded rates above the national figure of 20.74 percent with the Upper East and West Regions registering 27.00 percent. The others are Western, Greater Accra, Ashanti and Central Regions.

Volta Region registered the lowest inflation rate of 12.35 percent during the month under review.