January inflation jumps to 9.08 %

Headline inflation rate for last month jumped to 9.08 percent, due partly to a 30 percent increase in petrol prices, Ghana Statistical Service has announced.

The rate which is 0.5 percentage points high than that of December 2010 figure of 8.58 percent is the first time in 19 months.

The fuel price will continue to impact on prices of goods, Mrs. Philomena Nyarko, Deputy Government Statistician who announced this at a media interaction in Accra said, prices climbed 2.1 percent during the month under review.

National Petroleum Authority increased gasoline prices on January 4, prompting the Ghana Private Road Transport Union to raise fares by 18 percent. The increase follows a rally in global oil prices and was the first since October 2009, when gasoline was raised by five percent.

Since the outlook of inflation for the year points to further rise inflation rate would continue to rise in the coming months as the recent fuel price hike and currency weakness feed through, an analyst predicted.

Mrs. Nyarko explained that the food and non-alcoholic beverages group has been recording single digit inflation rate since January 2010;The non-food inflation rate, on the other hand, though declining has been recording double inflation rates.

“In the food group which has a weight of 44.91 percent, the sub groups with the highest inflation rate are minerals waters, soft drinks and juices recording 24.06 % whiles sugar, jam, honey, syrups, chocolate and confectionary had 18.57,and fruit 12.87 percent.

“The non-food group with a weight of 55.09 % has major influence on overall rate of inflation. In January there was an appreciable inflation rate in transport (19.42%), Alcoholic beverages, tobacco and narcotics (1925%) and housing, water, electricity, gas and other (14.79%). The average January non-food inflation rate is (11.82%)”.

The inflation rate had fallen from a five-year high of 20.7 % in June 2009, enabling the central bank to cut its key interest rate by 4.5 percentage points last year.
The last reduction in July took the rate to 13.5 % from 15 %.

The stability in the foreign exchange market that facilitated the slowdown in inflation ended in January, with the cedi losing 5.5% against the dollar in the month, pushing up import costs.

Mr. Willson Atta-Krofah, President of the Ghana National Chamber of Commerce and Industry, told B&FT that the rise in inflation for this month was expected because of the fuel price increase by government, but predicted it’s just a short-term hike.

He explained that the food items are the major determinant factor of the national inflationary trend and that the country is currently experiencing increased food harvest.

On the regional inflation, Greater Accra recorded the highest inflation rate of 12.50% and Volta region recorded the lowest inflation of 5.83% in January 2011.