Reduction in fuel prices, transport fares not to reduce headline inflation rate for December – Gov’t Statistician

Reduction in fuel prices, transport fares not to reduce headline inflation rate for December – Gov’t Statistician

Government Statistician and head of the Ghana Statistical Service (GSS), Prof. Samuel Annim has opined that recent reductions in fuel prices and transport fares is not going to result in a reduction in the country’s headline inflation rate particularly for the month of December as anticipated by the public.

According to the Government Statistician, despite the weightings of both fuel prices and transport fares in the computation of national inflation rate, recent reductions are not enough to cause a reduction in the national inflation rate.

At best, recent reductions in fuel prices and transport fares will only result in a slow down of the increasing rate of headline inflation.

“So between the month of October and November, the change was 9.9% as inflation shot up from 40.4% to 50.3% respectively, with the recent reductions in the two items will only slow down the rate at which headline inflation is increasing.

“So for the month of December, you are likely to see a slow down in the change from 9.9% to a lesser figure, but the headline inflation is very likely to still increase (sic),” he quipped in an interview on the PM Express Business Edition monitored by norvanreports on Thursday, December 29, 2022.

Speaking further during the interview, averred the GSS will on January 15, 2023 announce the new headline inflation rate as computed for the month of December 2022.

Adding that, policy makers should look beyond the national headline inflation and focus on the disaggregation of the 13 divisions that drives the country’s national headline inflation rate for policy decision making.

According to him, policy direction or decisions based on the disaggregation of the national headline inflation, will help in the reduction of the country’s national inflation rate.

Inflation rate posts monthly jump of 9.9%; now 50.3%

Ghana’s annual inflation rate quickened for the 18th straight month to 50.3% in November of 2022, up from 40.4% in the prior month, marking a month-on-month increase of 9.9%.

The country’s inflation rate is the  highest reading since May 2001 – although less than the 63.1% inflation rate recorded in March 2021.

The new headline inflation is above the central bank’s medium target band of 6% to 10%.

The hike in inflation is reported to be on the back of the incessant depreciation of the local currency against its anchor currency – the dollar.

According to government statistician, Professor Samuel Kobina Annim, continued depreciation of the cedi during the month raised the cost of imported goods (55.1% as against 43.7% in October) like gasoline, driving up transport costs (63.1% as against 46.3% in October).

The cedi, in the first week of the month of November, had recorded close to 60% year-to-date depreciation against the dollar.