Inflation outlook still negative as oil prices to drive rate higher in coming months
Outlook for the country’s headline inflation still remains negative according to economic analysts with State-owned insurance firm, SIC.
According to the analysts – Godwin Odoom and Obed Sackey – inflation is expected to inch higher on the back of rising input costs and weaker exchange rates of the local currency (cedi).
In a report made available to norvanreports, the two analysts assert spikes in oil prices as the Russia-Ukraine conflict continues, will drive overall inflation higher in the coming months.
This, they further note, will be a drag on the country’s overall economic activity in the remaining months of the year.
Their assertion, however, goes contrary to that of the Governor of the Central Bank, Dr Ernest Addison, who noted in an interview with Bloomberg monitored by norvanreports that, inflation had reached its peak in May and that inflation is expected to taper (reduce) for the rest of the year (2022).
But this, however, is not the case as inflation continued its upward trend reaching 29.8% in the month of June – the highest recorded inflation rate in 19 years.
Inflation rate for June was mainly driven by transport costs which saw a 41.6% rise in inflation compared to 39.0% in May followed by Household Equipment and Maintenance (39.6%), Housing, Water, Gas and Electricity (38.4%) and Food and Non-Alcoholic Beverages (30.7%).
The month-on month inflation between May 2022 and June 2022 stood at 3.0%. The headline inflation rate is more than double the upper ceiling of the central bank’s inflation target band of 8+/-2%.
Food inflation increased marginally to 30.7% which is up from May’s food inflation of 30.1%. Non-food inflation stood at 29.1%, compared to 25.7% recorded in May. Overall month-on-month food inflation was 2.3%.
Inflation for imported goods was 31.3% while inflation for local goods was 29.2%. For three (3) months running, inflation for imported items exceeded domestic inflation.
At the regional level, the Eastern Region recorded the highest inflation rate of 35.8% while the Upper East Region recorded the lowest inflation rate of 21.0%.
Government Statistician, Professor Samuel Kobina Annim, during the announcement asserted that a downward trend in inflation was dependent on the interventions that policymakers would put in place to check the rate of inflation.
