The rate of Consumer Price Inflation (CPI) for November 2019 has been reported as 8.2% (Ghana Statistical Service). This is up 0.5% from 7.7% in October 2019. According to the Ghana Statistical Service (GSS), the Alcoholic Beverage, Tobacco and Narcotics division in the basket had the highest inflation year-on-year to November 2019.
Alcohol, Tobacco & Narcotics
The Alcoholic Beverage, Tobacco and Narcotics division recorded inflation of 13.4% between November 2018 and November 2019. One major possible reason why consumers had to pay more within the period could be due to intense competition among players causing them to spend more on advertising and passing on cost to consumers. Other reasons could be the increase cost of operations due to factors like Cedi depreciation to major currencies and particularly the US Dollar.
Though food inflation still remains the largest contributor to inflation, its year-on-year inflation to November 2019 stood at 8.4% and fourth in list of inflation items. However due to its importance in consumption, food inflation remains the highest contributor to the overall inflation figure. Food contributed 44.4% to the overall inflation figure but did not have the highest inflation over the year.
The other divisions that followed the Alchohol, Tobacco and Narcotic division are Transport in the 2nd place with 12.3% increase in prices and Utilities in the 3rd place with 9.6%. All rates are from November 2018 to November 2019.
Transport inflation is high due to the Cedi depreciation that has mainly driven upwards fuel prices significantly in 2019. Utilities has also seen its fare share having been increased by 8% between Electricity (5.9%) and water (2.2%), announced by PURC in October 2019.
The December 2019 inflation could be higher due to the further expected Cedi depreciation at the end of the year. The depreciation would push the transport inflation higher and therefore the overall inflation. As the largest contributor, food also usually sees increases in price at the end of December.