The general price levels of goods and services in July 2020, considered on monthly basis, shows that price increment, especially of food items, are returning to normal, even though headline inflation has recorded its highest year-on-year rate since August 2019.
Data published by the Ghana Statistical Services (GSS) show that, despite inflation increasing by 11.4 percent in July 2020 on an annualised basis – making it the highest ever since the new series of data took effect from August 2019, prices on a month-on-month basis increased averagely by 0.5 percent compared to the astronomical rates recorded in April to June where monthly inflation rates soared by 3.2 percent, 17 percent, and 10 percent respectively.
This indicates that, considered on monthly basis, prices are increasing at pre-COVID-19 levels again. The data indicates that with the exception of fuels, most product categories saw month-on-month inflation rates comparable to the period October 2019 to March 2020. The average month-on-month inflation recorded in the months October 2019 to March 2020 was 0.7 percent.
Transport, according to the report presented by Government Statistician, Prof. Kobina Annim, was the item which recorded the highest change in inflation for the month since April this year. On a year-on-year basis, it increased by 9.2 percent in July compared to the 6.6 percent, 5 percent, and 5.9 percent in April, May, and June respectively.
Food prices, especially, seem to be returning to their normal pre-pandemic levels considering that the July rate was 0.1 percentage point lower than in June and 1.4 percentage points lower than May. Food and non-alcoholic items, as usual, remained the dominant item in the basket, contributing to more than half of the national average. Food inflation recorded 13.7 percent compared to 13.8 percent recorded in June. Non-food inflation was 9.7 percent compared to the 9.2 percent a month earlier.
The surge in food prices began in March when there was mad rush for foods due to public panic buying in anticipation of the lock down announcement by the President on March 27, 2020. According to the GSS, data collected during the lock down period shows that prices in the two regions affected by the decision – Greater Accra and Greater Kumasi Metropolitan areas – recorded the highest prices in food inflation, 20.8 percent and 18.2 percent respectively, making it averagely 8.8 percentage points higher than the other regions which didn’t experience any partial lock down.
Locally produced items continue to see surge in their prices compared to imported ones, as restrictions on international trade has effectively almost brought imports to a halt. Inflation for locally produced items recorded 14.1 percent whereas that of imported items was 5.1 percent.
At the regional level, the overall year-on-year inflation ranged from 4.2 percent in the Volta Region to 16.2 percent in Greater Accra. In all, but Greater Accra, Northern Region, and Volta Region, Food inflation was higher than Non-Food Inflation.
