Inflation Hits 15.3 Per Cent In July

The annual consumer price inflation rose Philomena Nyarko Pixto a four-year high of 15.3 per cent in July from 15.0 per cent in June, the Ghana Statistical Service (GSS) said yesterday.

The monthly change rate in July 2014 was 1.6 per cent, the same as in June.

Government Statistician, Philomena Nyarko told a news conference in Accra the new price inflation was partly due to the increases in the price of utilities and fuel.

The rise moves the rate past the revised 2014 target of 13.0 per cent plus or minus 2 per cent set in last month’s mid-year supplementary budget.

Dr. Nyarko also blamed the depreciation of the cedi against the dollar a factor for the rise.

The forex market pitched one dollar against 3.78 cedis as at yesterday.

The GSS boss said food inflation stood at 5.0 per cent in July, down from 7.9 per cent in June, while the year-on-year non-food inflation rate for July 2014 was 23.1 per cent compared to the 20.3 per cent recorded for June 2014.

“The year-on-year non-food inflation rate is more than four and half times higher than the food inflation rate,” she said.

The main drivers in the non-food sector were led by housing, water, electricity, gas and other fuels which went up by 62.0 per cent, followed by transport which was also up by 38.3 per cent.

The price drivers for the food inflation rate, according to the GSS, were mineral water, soft drinks, fruits and vegetable juices, among others.

Northern Region, the GSS said, recorded the highest regional year-on-year inflation rate of 21.1 per cent while the Volta Region recorded the lowest of 11.2 per cent.

The inflation rate for Greater Accra Region was the same as the national average of 15.3 per cent.

Dr. Nyarko said that monthly CPI stood at 1.6 per cent in July.

The July rate is a further sign of fiscal instability in Ghana, whose fast-growing economy based on exports of gold, cocoa and oil, has been undermined by macro economic problems.

The government said, this month that it would seek support from the International Monetary Fund to address the challenges, which include a double-digit budget deficit and a currency that has fallen rapidly this year.

Macroeconomic challenges continue to intensify this year as government funding costs raised steeply, while 182-day treasury bill yields have jumped above 25 per cent, from 19 per cent.

In addition, interest costs now account for one-fifth of government expenditure, high yields have seen auctions of five- and seven-year bonds cancelled, while a shortage of local currency liquidity has resulted in banks and non-bank financial institutions cutting holdings of government securities.

This has complicated liquidity management and added to inflationary pressures and cedi weakness. The cedi has plummeted more than 30 per cent since the beginning of the year.

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