The national year-on-year inflation rate dropped from 11.4% in July to 10.5% in August 2020, a 0.9 percentage points difference, according to the latest CPI report released yesterday by Ghana Statistical service (GSS).
The GSS explained that the marginal decline in inflation last month was as a result of the negative month-on-month food inflation of -1.1 percent.
This indicates a decline in Month-on-month inflation between July 2020 and August 2020 by 0.4 percentage points. This is an indication that actual prices decreased marginally last month.
Furthermore, the contribution of food items (47.9%) to total year-on-year inflation is lower than previous months and similar to the months prior to COVID-19.”
According to the GSS, the marginal decline in inflation in August stands in contrast to the average 0.9% month-on-month inflation that was recorded during the months April to July 2020 and the average month-on-month inflation rate of 0.7% that was recorded in the six months prior to COVID-19.
Details of the year-on-year inflation for the past 8 months have been displayed in figure 1.
Figure 1: Consumer Price Indices January to August 2020.
Source: Ghana Statistical service
Regional Inflation
Regional analyses revealed that, the overall year-on-year inflation ranged from 4.7% in the Volta Region to 13.6% in Greater Accra.
According to the GSS, when separating inflation in to Food and Non-Food inflation, it is clear that Greater Accra had a lower Food inflation (8.1%) than Non-Food inflation (17.5%). In contrast, Ashanti Region recorded the highest Food inflation (20.3%), but a relatively low Non-Food inflation (4.8%).
The highest overall month-on-month inflation of 3.4% was recorded in the Upper West Region. This, the GSS explained, was driven by the Food and Non-Alcoholic Beverages Division and the Alcoholic Beverages, Tobacco and Narcotics Division.
Food and Non-Food Inflation
The report showed that, in August 2020, food contributed 47.9% to the total inflation and thus is still the predominant driver of year-on-year inflation. “This percentage is lower than the previous months and comparable to the contribution levels of Food to total inflation prior to COVID-19”, GSS said.
On the other hand, year-on-year Non-Food inflation in the month of August was 9.9%, “which is higher than the 9.7% measured in July 2020”. On month-on month basis, non-food inflation was 0.2%, which is lower than the 0.9% measured in July 2020, GSS added.
The GSS explained that “total month-on-month inflation is negative, because it is pulled down by negative Food inflation (-1.1%) and negative inflation for the Recreation, Sport and Culture Division (-1.4%)”.
Imported and Local Inflation
According to the report, inflation of imported goods was 4.8%, while that of local goods was 12.6% on average. Month-on- month inflation for imported goods was 0%, while month- on-month inflation for local goods was -0.8%. The main contributor to negative local inflation, according to the GSS, “was the inflation of locally produced foods”.
