The Ghana Statistical Service (GSS) reported that in May, the country’s inflation rate decreased for the fifth consecutive month, from 21.2% in April to 18.4% year over year.
The steep dip was ascribed by the Ghana Statistical Service to a combination of easing pressures in the non-food inflation basket and reduced transportation fares, which were a direct result of declining fuel prices.
Following a protracted period of economic instability, the inflation rate is the lowest since February 2022, indicating increasing stability in consumer pricing.
Speaking to reporters in Accra, Government Statistician Dr. Alhassan Iddrisu stated, “The reduction in fuel prices at the pumps and the subsequent reduction in transport fares contributed the most to the May inflation.”
He pointed out that non-food inflation had also fallen precipitously, suggesting that there was more widespread relief in a number of economic areas.
“The inflation trend we are witnessing shows sustained deceleration,” Dr. Iddrisu said. “Food remains a key inflation driver, but the sharper drop in non-food inflation suggests a broad-based easing of inflation across the economy.”
Tighter fiscal and monetary policies, relative exchange rate stability, and better external price circumstances are all contributing factors to the present inflation decrease.
“This trend underscores the effectiveness of recent monetary and fiscal measures, the recent appreciation of the Cedi against the major international currencies, favourable external price dynamics, and positive market sentiment,” Dr. Iddrisu continued.
Another important indicator of pricing pressure, the Producer Price Inflation (PPI), also had a notable slowdown, falling from 24.4% in March to 18.5% in April.
The data indicates that price pressures at the factory gate are continuing to ease, providing some respite for both consumers and producers.
With a tolerance margin of plus or minus two percentage points, inflation is still more than twice the Bank of Ghana’s medium-term target of 8%, notwithstanding the improvement.
The monetary policy of the central bank has been cautious in order to stabilize inflation expectations.
Currency fluctuations, shocks to the price of commodities globally, and disruptions in important export industries like cocoa and gold have all contributed to the nation’s economic difficulties, which it is now slowly overcoming.
Source: newsthemegh.com