Prices of local goods increasing faster than imported goods

For a fourth consecutive month, inflation for locally produced goods has been growing faster than inflation for imported goods, although Ghana is an import dependent country. Inflation for imported goods as at February was 5.9 percent, well below the 8.6 percent inflation for locally made goods.

This is according to the latest data released by the Ghana Statistical Service (GSS).

The Consumer Price Index (CPI) measures proportionate changes in the prices of a fixed basket of goods and services that households in Ghana consume.

Inflation for imported goods declined from 8.9 percent in August 2019 to 7.5 percent in November 2019, when inflation for imported goods was lower than locally produced goods. The trend continued to 6.1 percent in December 2019 and further declined to 5.8 percent in January 2020. However, in February 2020, the rate inched upwards slightly to 5.9 percent but remained lower than for local goods, which was at 8.6 percent.

At the press briefing, the Deputy Government Statistician, Statistician in charge of Services, David Kombat said the cause of the decline remains unclear.

However, in the past months, the cedi has appreciated against the major international trading currencies.

The national year-on-year inflation rate was 7.8 percent in February 2020, the same rate as last month.

Mr. Kombat said, “this continued the trend of a stable inflation of about 8.0 percent recorded over the past six months.”

Due to the relative importance in consumption, Food is still the main driver of inflation in Ghana. Compared to the same month last year, prices of Fruits and Transport Services increased relatively more than other goods while price inflation of Electric Appliances, Cars, and Electricity decreased.

Mr. Kombat said, “Compared to January 2020, we see shift in the inflation for the ‘Housing, Water, Electricity and Gas’ division. This division went from 7.6 percent to 6.3 percent, and is therefore also a less important contributor to inflation compared to previous months.”

Regional inflation

At the regional level, the Greater Accra region recorded the highest inflation of 9.7 percent. It was followed by the Volta and Western Regions with 9.5 and 8.3 percent respectively.

But the Upper West Region recorded the lowest inflation rate of 5 percent.

The non-food factors that accounted for Greater Accra’s high inflation rate for February 2020, were education services at 15.8 percent; recreation, sports and culture recorded 13.2 percent, clothing and footwear recorded 13.1 percent, and the least recorded is information and communication with an inflation of -0.4 percent.”

For the food inflation for Greater Accra, fish and other sea foods recorded the highest with an inflation of 26 percent, with the lowest being cereal products with inflation of -0.6 percent