February inflation up to 16.5 percent

Consumer inflation kept an upward trend in February 2015, recording a marginal increase of 16.5 percent from 16.4 percent in the previous month on the back of upturns in the price of utilities, housing and fuels, the Ghana Statistical Services has said.

The latest inflation figure, which is a 0.1 percentage points higher than the previous month’s, pushes it further away from the end-of-year inflation target of 11.5 percent -- plus or minus two percent.

Fast growth in the economy driven by exports of gold, cocoa and oil has been undermined by fiscal problems including a rising budget deficit and the cedi's rapid decline.

Government is expected to cut its expenditure and implement a slew of International Monetary Fund (IMF)-inspired rationalisation measures for 2015, as part of a broader package of reforms to transform the economy and restore fiscal stability.  

A tight stance in the 2015 wage negotiations is part of broader measures by government to exert control on its fiscal exigencies, which has an overall goal of cutting the wage-to-tax revenue ratio to 35 percent by 2017. 

Once again, efforts being made to check inefficiencies and leakages in the public sector payroll system are expected to be highlighted.

Government previously planned to spend GH¢42billion this year on the assumption that crude oil would trade at least for US$90 per barrel, and the rapid fall in the price of the commodity could potentially stall government’s fiscal deficit target of 6.5 percent of GDP.

Dr. Philomena Nyarko, Government Statistician speaking at a media interaction in Accra, said the monthly change rate for February was 1.2 percent, compared to 3.4 percent recorded for January 2014.

Dr. Nyarko explained that the year-on-year non-food inflation rate for February 2015 was 23.0 percent, which is the same as that recorded for January 2015.

She added that the year-on-year food inflation rate for February 2015 was 7 percent, an increase of 0.1 percentage point from the 6.9 percent recorded for January 2015, with the main price-drivers being mineral water, soft drinks, fruit and vegetable juice, coffee, tea and cocoa, food products, sugar, jam, honey, chocolate and confectionery, meat, milk, cheese and eggs, and cereals.

“The year-on-year inflation rate for imported items stood at 22.5 percent, more than one and half times higher than the inflation rate for locally produced items,” she added.

Dr. Nyarko said four regions -- Central, Volta, Upper East and Ashanti -- recorded inflation rates higher than the national average of 16.5 percent, and that Northern Region recorded the same inflation rate as the national average.

The Central Region recorded the highest regional year-on-year inflation rate at 20.0 percent, while the Upper West Region recorded the lowest of 13.3 percent.