Ghana's November inflation drops 16.92 percent

Headline inflation has eased for the fifth consecutive time in the year, to the November rate of 16.92 percent - the lowest figure registered in the year so far.

The further drop represents a decline of 1.45 percentage points from the October rate of 18.04 percent.

The decrease was mainly driven by the non-food group which constitutes 55.09 percent of the consumer price index (CPI).

Official figures released by the Ghana Statistical Service (GSS) named recreation and culture as the main movers of the decrease in the non-food component, followed by health and furnishing, household equipment, clothing and footwear.

Vegetables, bread, fish, and cereals were the major contributors to the decrease within the food and alcoholic beverage component of the national basket.

Contributions to the November rate therefore show that inflation for the non-food group was 20.05 percent, far higher than the 12.38 percent inflation recorded by the food group.

The corresponding figures for October 2009 were 21.15 and 13.53 percent for non-food and food respectfully.

Dr. Grace Bediako, Government Statistician, briefing the media in Accra on the latest developments in the CPI, explained that the latest decline is in line with the favourable trend of the harvest season.

The rate of inflation has been relatively high in 2009, averaging 19.60 percent compared to 2008 averaging 16.46 percent.

The last three months recorded rates below the year to date average with average of 19.60 percent. The highest rate of 20.74 percent was recorded in June and the lowest is this month.

Inflation has been slowing since the domestic currency, the cedi, halted its slump against the dollar six months ago. From January to October, the cedi depreciated, cumulatively, by 17.5, 29.1 and 22.6 percent against the US dollar, the pound and the euro respectively.

This compares with depreciations of 17.9 and 5.9 percent against the US dollar and the euro respectively, but an appreciation of 3.0 percent against the pound sterling over the corresponding period in 2008.

Government is however optimistic inflation will continue to fall to the end of the year, and possibly reach an end-year record that is close to the budget target of 14.5 percent. This is based on the rather tight 2009 budget and the relative stability of the cedi since the latter part of the third quarter.