Food pushes August inflation down to 10.5%

The inflation rate for the month August was down marginally by 0.4% from the July figure of 11.2 per cent to 10.5 per cent on account of the food basket of the Consumer Price Index (CPI).

The August figure is the least the country has experienced after a spike of 10.6% in April due to COVID-19 panic buys.

This implies that the rate at which prices of goods and services has been increasing in the last three months has been slowest in August.

This was predominately driven by negative month-on-month food inflation of -1.1%, the Ghana Statistical Service (GSS) said as it released the figures on Wednesday, September 9.

Inflation measures the rate of increase in the prices of good and services over a period of time.

Food inflation for August 2020 was 11.4%, a reduction from the previous months figure 13.7% recorded in July. On the other hand, non-food inflation inched up to 9.9% in August  from 9.7% in July 2020.

Inflation for locally produced items was 12.6% while that of imported items was 4.8%.

The BoG’s cut in Monetary Policy Rate (MPR) which was to spur growth and increase liquidity in COVID-19 times has not resulted in a significant spike in inflation even though governments target band of 8.0 ± 2 is still exceeded.

The latest inflation figure will be the key driver as the Monetary Policy Committee of the apex bank assesses the economy to announce a revised policy rate by the end of September.

The BoG’s MPR serves as a benchmark for interest rates at which commercial banks issue loans to customers.