March Inflation to hit 18.1%, announcement this week



The Ghana Statistical Service (GSS) is expected to announce the consumer price inflation for the month of March 2016 next week. In February 2016, consumer price inflation fell to 18.5%, marking a slow down from 19% recorded in January 2016.

The latest statistics released by the GSS indicates that Consumer Price Index (CPI) increased from 168.0 points in January 2016 to 169.2 points in February 2016 (representing a monthly rise of 0.7%).

In February 2016, six sub-groups in the food and non-alcoholic beverages category recorded inflation above the group average of 8.3% as against the total of five sub-groups recorded for the month of January 2016.Additionally, four sub-groups in the non-food inflation category (as compared to just two sub-groups recorded in the preceding month) recorded rates above the group average of 24.5%.

General prices of coffee, tea and cocoa, mineral water, soft drinks, fruits, sugar, jam, honey, chocolate, food products, vegetables and oils continued to rise as traders pass on the extra cost of education, recreation and culture, housing, water, electricity, gas and transport to consumers.

A cursory look at changes in food prices on the world market also gives a rather disturbing picture. According to the Food and Agriculture Organization (FAO), the Food Price Index (FPI) inched up marginally to 151.0 points by end of March 2016.

Unlike the preceding month, the cumulative increase in vegetable and sugar prices by 41.4 points in March far-outweighed the cumulative decrease in meat, dairy and cereals by 14.2 points.

Given the recent stability in the cedi and interest rates amid a growing government debt stock and the persistent review in general prices of goods
and services on the domestic market, we estimate the CPI to inch up by 1.2% in March 2016. In reference to the CPI computed by the GSS for the month of March 2015, we expect consumer price inflation to decrease to 18.1% for March 2016.

Figure 1: Year-on-Year Consumer Price Inflation (%), March 2015 to March 2016


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Source: Ghana/GN Research

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