Rent charges, plantain push May inflation to 11.3%

Prices of goods and services went up at a moderate pace last month than they did in April this year, according to data released by the Ghana Statistical Service (GSS) yesterday.

The data showed that rent charges, plantain and cassava were the key drivers of the May inflation rate, which the GSS reported at 11.3 per cent.

Inflation measures the average change in the general price levels of goods and services over a period.

The consumer price index (CPI), which the GSS uses to measure the rate showed that while general price levels rose by 10.6 per cent in April, they increased by 11.3 per cent in May, indicating a difference of 0.7 per cent.

The May rate is now highest rate of annual increase in inflation since August last year, when the service started using a rebased basket to calculate inflation.

Moderation

The Government Statistician, Prof. Samuel Kobina Annim, who released the May CPI virtually from Accra, told the Daily Graphic that just like the April rate, last month’s inflation rate reflected the impact of the raging novel Coronavirus (COVID-19) pandemic on the general price levels of goods and services.

He, however, explained that the May figure showed a moderation in the pace of increment in the general price levels .

He said in April, when COVID-19’s impact on the inflation rate was first registered, the annual rate jumped by 2.8 per cent to 10.3 per cent.

He said the May rate of 11.3 per cent showed that the figure rose by 0.7 per cent from the previous rate, indicating a reduction in the pace of the increment.

Prof. Annim explained that the data further showed that the monthly inflation rate, which compares inflation in one month to the preceding month, also registered a reduction.

These developments, he said indicated that the increment in annualised inflation might have taken a downward trend.

“But there is still a challenge because if the borders remain closed and the disequilibrium between demand and supply continuous, then we could get price levels increasing at a faster pace,” he said.

Imported inflation

The GSS data further showed that inflation of local goods and imported goods registered their record levels last month.

While inflation of local goods rose to 14.1 per cent in May, the highest since August 2019, that of imported goods was 4.8 per cent, the lowest since the service started using the rebased basket.

Prof. Annim said the development was because more people were shifting their attention to locally produced goods, following the limited availability of imported items.

Regional distribution

At the regional level, the data showed that the Upper East Region recorded the lowest rate of 3.1 per cent while the Greater Accra Region recorded the highest rate of 13.3 per cent.

Prof. Annim said the data showed that the inflation in the Western Region rose from 9.2 per cent in April to 12.8 per cent in May, reflecting the surge in COVID-19 cases in Obuasi, the resultant panic buying in the community and the impact the developments had on price levels.

He said because people were apprehensive that the surge in cases could lead to the imposition of movement restrictions, they engaged in panic buying to stock ahead of any lockdown.

That he said resulted in prices increasing at a faster pace than before.