The national year-on-year inflation rate has slowed down to 8.5% in April 2021, a 1.8 percentage point lower than the 10.3% recorded in March 2021. This is as a result of a significant decline in food inflation.
Meanwhile, this is the lowest rate recorded for more than a year now. It also means that for the first time in 2021, inflation has fallen within the medium-term inflation target band of 8±2 percent. The sharp decline in the rate of inflation gives much optimism that the government’s 8.0% target for 2021 is achievable. However, it is still early days yet.
In the latest Consumer Price Index (CPI) newsletter released on Wednesday, May 12, 2021, the GSS indicated that month-on-month inflation was 1.5%. This is 0.6 percentage point higher than the 0.9% recoded in March 2021.
Furthermore, food inflation saw a significant decline in April. The recent figures show that food inflation rate was 6.5% which is lower than the 10.8% recorded in March 2021. As such, the food inflation rate is lower than the average of 12.8% over the last 12 months. Meanwhile, food contributed 33.8% to overall inflation, the lowest since the rebase in 2018. It also represents a significant decline from the 46.3% it contributed in March.
The month-on-month Food inflation was 2.3% in April 2021, higher than the 0.2% recorded in March. The Ghana Statistical Services said this is “an indication that food items are expensive today than last month”.
Meanwhile, within the food group, Fruits and Nuts recorded a month-on-month inflation rate of -0.4%. This contributed significantly to the reduction in the overall inflation in April 2021. Still, vegetables recorded the highest month-on-month inflation rate of 5.4% in April 2021.
Also, the Northern region recorded the highest year-on-year food inflation of 10.7%. This was higher than the 3.3% recorded in the Greater Accra region.
Conversely, Non-food inflation rate inched up to 10.2% in April 2021 from the 10.0% recorded in March 2021. The ‘Housing, Water, Electricity, Gas’ sub-group recorded the highest inflation of 25.0% in April 2021. However, the recent rate is lower than the 29.0% recorded in March.
Also, Transport (9.6%) and Insurance & Financial Services (9.0%) recorded inflation rates above the national average of 8.5%. The Month-on-month Non-Food inflation was 1.0%. At the regional level, Greater Accra recorded the highest year-on-year Non-Food inflation of 19.2%. On the other hand, the Eastern Region recorded the lowest Non-Food inflation of 1.4%.
Local & Imported Inflation
Furthermore, the data shows that inflation for imported goods was 7.4%, up from 6.8% recorded in March 2021. The current imported inflation is also higher than the 6.7% recorded in February 2021. On the contrary, inflation for locally produced items was 8.7%, down from the 11.7% recorded in March.
At the regional level, the overall year-on-year inflation ranged from 2% in the Upper West Region to 12.1% in Greater Accra Region. This means that inflation is still highest in the capital city of the country. It is however, lower than the 17.0% recorded in March 2021. Moreover, Ashanti region also recorded an inflation rate of 10.1%, higher than the national average.
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