March inflation rate up to 16.6%

Headline inflation rate rose to 16.6 percent in March this year, up by 0.1 percentage points from 16.5 percent recorded in the previous month, on the back of increases in utility tariffs and fuel prices the Ghana Statistical Services has reported.

This makes it the third straight month that inflation figures have risen this year, showing that the rate at which prices of goods are going up is gradually eating away consumers’ savings.

Deputy Government Statistician Baah Wadieh, who announced this at a media briefing in Accra, said the monthly rate of change for March was 1.0 percent compared to 1.2 percent recorded for February 2015.

Mr. Wadieh said food inflation in March was 7.2 percent compared with 7.0 percent in February. Non-food inflation for March stood at 23.1 percent, up marginally from 23.0 percent recorded in February.

“The year-on-year non-food inflation rate is more than three times higher than the food inflation rate,” Wadieh said --adding that inflation for imported items which was 21.3 percent is about one and half times higher than the inflation rate for locally produced items at 14.9 percent.

He said the main drivers for the non-food inflation were housing, water, electricity, gas and other fuels, which stood at 26.2 per-cent and transport at 25.8 percent. The price drivers for food inflation were coffee, tea and cocoa, mineral water, soft drinks, fruit and vegetable juices, among others.

The country’s economy has been recording a dramatic slowdown, as is evident by the energy crisis and instability of the macro-economy -- which have taken a huge toll on economic activities, with consumer and business confidence at very low levels.

The Ghana Employers Associations this week has confirmed that close to 13,000 workers have been sacked in the last four months.

According to employers, the situation can be solely blamed on the ongoing power crisis and the resultant increase in cost of production.

Industry is currently reeling from the power crisis after the sector was roped into the load-rationing schedule at beginning of the year.

Some analysts have opined 2015 will also be a difficult year as the government, which has projected Gross Domestic Product (GDP) growth of 3.9 percent, begins to implement austere policies aimed at tackling the country’s wide budget deficit of 9.8 percent. 

Meanwhile, the World Bank has forecast a more optimistic GDP growth of 4.5 percent for Ghana this year.

The energy supply deficit, which has resulted in load-management of power, also appears far from over in spite of the start of gas production to feed the thermal plants of the country’s main power generators -- VRA and Asogli.

Government’s revenue target is also a concern to policymakers, as it is feared the slump in oil prices on the world market will also affect the budget programme.

The country faced a fiscal crisis last year as the budget deficit surged, putting pressure on the cedi currency which slumped 31 percent against the dollar -- helping drive inflation upward.

Central Region (Province) recorded the highest regional inflation rate of 19.2 percent, while Brong Ahafo Region recorded the lowest rate of 14.3 percent.

Three regions, namely the Central, Volta and Ashanti Regions, recorded inflation rates above the national average of 16.6 percent.