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Ghana’s consumer inflation soars higher to 13.9% in January

THE year-on-year consumer inflation rate for Ghana increased 1.2 percentage points to record 13.9 percent in January compared with the 12.7 percent in the previous month according to latest data from the Ghana Statistical Service (GSS), Koku Devitor reports.

The GSS said for the first time in seven months, non-food inflation (14.1 percent) exceeded food inflation (13.7 percent).

Housing and Transport (which includes fuel) once again were the two divisions that recorded the highest inflation with 28.7 percent and 17.4 percent respectively,’ said the GSS.

It added that the contribution of Housing, Water, Electricity and Gas to overall inflation increased by 4.6 percentage points from 17.5 percent  in December 2021 to 22.1 percent in January 2022. Inflation for locally produced items continues to dominate imported items.

Ghana, with the second largest economy in West Africa, has set a medium term inflation target band of 8±2 percent.

However, the Bank of Ghana said in its latest forecast that inflation would remain above this band in the near-term, driven by external and domestic factors, and would  only return to target about four-quarters ahead.

The central bank listed the factors contributing to the inflationary risk as rising crude oil prices and its transmission to ex-pump petroleum prices and transportation costs, rising global inflation, food price uncertainties, and the fiscal outlook.

The National Petroleum Authority (NPA), regulator of Ghana’s the downstream petroleum sector announced the restoration of the Price Stabilization Recovery Levy (PSRL) on petroleum products in January.

This resulted in the upward adjustment of ex-pump prices of petroleum products from an average of Ghc 6.99 per litre to about Ghc7.3 per litre.

The government, in dire need of fiscal space to execute its 2022 budget, has been having a difficult time passing the proposed electronic services levy (E-levy) as opposition members of the hung parliament have vowed to block the  passage of the ‘obnoxious’ levy.

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