Inflation drops further
The inflation rate for September 2010 dropped for the 15th consecutive month since June 2009 to 9.38%. The decline was 0.06% lower than that of August 2010 which was 9.44%. September’s inflation rate was the lowest in eight years since the CPI was rebased in 2006 to shift the base year from 1997 to 2002.
The rate of inflation in Ghana, measured by the percentage change in consumer price index over a 12-month period, takes account of staples in the country’s food basket as well as non-food items such as transportation, education and hotel services.
According to the Ghana Statistical Service, the food component of the price index is mainly responsible for the continuous fall in the rate of inflation over the period.
Food inflation has been recording single digit percentages since January 2010 falling from 9.1 % to 5.3 % in August.
The largest decline in inflation this year was recorded in April (1.66 %) followed by January (1.19 %) and June (1.16%). Even though the non-food inflation rate declined, it still remains in the double digits. It fell from 18.79 % in January 2010 to 11.84 % in July but increased to 12.25 % in August.
With recent labour unrests, there are signs of potential wage pressures which could exert pressure on the government’s budget and consequently affect prices. There are also concerns about the accumulation of arrears and the rolling out of the new public sector wage policy and the single spine salary structure.
However, the period between July and October is the traditional bumper harvest season for most food staples in Ghana and it is expected that there would be adequate supply of foodstuffs on the market which should help contain food prices.