Prices decrease for a fourth straight month, settling at 41.2% annual inflation rate.
Fresh Take:
Here’s an accessible rundown of Ghana's consumer inflation trends for April 2023, based on data from the Ghana Statistical Service (GSS).
Consumer inflation has seen a four-month downward spiral, with the rate dropping from a high of 54.1% in December 2022 to a more manageable 41.2% in April 2023. This decrease suggests a positive trend in the prices of goods and services. However, compared to April 2022, prices have nevertheless increased by 41.2%.
In March 2023, there was a significant drop in inflation, with the rate falling from 52.8% to 45%. Between March and April 2023, the rate of price increase slowed from 7.8 percentage points to 3.8 points. On a month-on-month basis, prices of goods and services rose by 2.4% in April 2023 after a deflation of 1.2% in March.
Prof. Samuel Kobbina Annim, Government Statistician, observed that food and non-alcoholic beverages were the major contributors to the overall inflation rate of 41.2%. Food inflation for April 2023 was 48.7%, while non-food inflation stood at 35.4%. Compared to the previous month, there was a more significant drop in non-food inflation (from 40.6% to 35.4%) than in food inflation (from 50.8% to 48.7%).
Housing, water, electricity, gas, and other fuels recorded the highest inflation rate of 59.0%. This was followed by furnishings, household equipment, and routine household maintenance at 56.3%, and food and non-alcoholic beverages at 48.7%. The division with the lowest inflation rate was restaurants and accommodation services.
Regionally, the Ashanti Region and Greater Accra Region had lower inflation rates than the national average of 41.2%, at 39.1% and 31%, respectively. In contrast, Western North Region recorded the highest overall inflation rate of 64.0%, driven primarily by food inflation at 78.3% in April 2023.
The GSS data highlighted that Greater Accra Region contributed 16.9% and the Ashanti Region accounted for 28.1% of the overall inflation. The North East Region had the lowest contribution, accounting for only 0.9% of the overall inflation.
Prof. Annim stated that food and non-alcoholic beverages played a significant role in driving the inflation rate. In Western North Region, for instance, fruit and nut products recorded an inflation rate exceeding 150%, while live animals and other meat products saw an inflation rate higher than 100%.
Looking forward, the gradual slowdown in the rate of price increases is a promise for the economy. However, certain divisions and regions still face high inflationary pressures. Prof. Annim suggested that government and relevant authorities should continue monitoring and implementing measures to maintain price stability and promote economic growth.
Market analysts expect this favorable base-effect to positively impact headline inflation in the second quarter of 2023, driving the disinflationary view. They foresee a stable local currency performance, stable prices of petroleum products, and the adherence to zero financing of government’s budget as supporting factors for this declining inflation trend. However, they remain cautious of possible risk factors, such as proposed price-sensitive taxes, tariffs increases, and the impact of the recently raised Value Added Tax (VAT) on the near-term inflation pace.
- The gradual decrease in consumer inflation, as shown in the report, suggests a promising trend for the economy's growth and development.
- In light of the April 2023 data from the Ghana Statistical Service (GSS), it is evident that the market's policy-makers should continue monitoring and implementing measures to maintain price stability, fostering economic growth.
- Market analysts predict that the favorable base-effect observed in the April 2023 data will positively impact the headline inflation in the second quarter of 2023, contributing to the disinflationary view.
- The stabilization of the local currency, stable prices of petroleum products, and the adherence to zero financing of government’s budget are expected to support this declining inflation trend; however, proposals for price-sensitive taxes, tariff increases, and the impact of the recently raised Value Added Tax (VAT) could pose potential risk factors for the near-term inflation pace.
