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Inflation rate for December 2020 hits 10.4%

According to figures from the Ghana Statistical Service (GSS) this is first time inflation has increased after four consecutive monthly inflation fall post-COVID-19 pandemic

The national year-on-year inflation rate hits 10.4% in December 2020, which is 0.6 percentage point higher than November 2020.

The inflation rate for November 2020 was at 9.8%.

The month-on-month inflation between November 2020 and December 2020 was 0.9%.

Food and non-food Inflation

Food contributed 59.1% to the total inflation. This is the highest contribution recorded since April 2020 when COVID-19 started to affect Ghana.

The increased rate of food inflation is the predominant reason for increased overall inflation, as without this increase, year-on-year inflation would have been lower than November 2020.

Within the food division, vegetables (24.2%) was the subclass with the highest rate of inflation, followed by fish and other seafood (22.9%).

Overall month-on-month food inflation was 1.5% (1.2 percentage point higher than November 2020 and higher than both on average in 2020 and in the same month last year).

Similar to food, alcoholic beverages and tabacco saw a relatively high month-on-month inflation (0.9%).

In contrast to food inflation, non-food inflation decreased to 7.7% in December 2020 as compared to 8.3% in November 2020 and 8.5% on average in 2020.

The month-on-month non-food inflation was 0.4%. After a few months of high inflation for transport, December 2020 saw low inflation for transport (4.8% year-on-year and 0.1% month-on-month as compared to an average 7.8% year-on-year and 0.4% month-on-month for 2020)

Compared to both the average month-on-month inflation for different divisions in the regions on average over the year 2020 and to the same month-on-month inflation indicators for December 2019, December 2020 recorded comparatively high inflation numbers.

Regional inflation breakdown

At the regional level, the overall year-on-year inflation ranged from 2.1% in the Upper West Region to 16.3% in Greater Accra Region.

With the exception of Upper West Region (-0.4% food inflation and 4.6% non-food inflation), all regions recorded higher food inflation than non-food inflation.

Compared to last month, only Ashanti, Brong Ahafo and Upper West Region had a lower food inflation for December 2020. The biggest difference was recorded in Central Region (3.5% to 12.8%).

On a month-on-month basis Northern Region recorded the highest overall inflation (1.7%) and Food inflation (3.1%).

Imported and local Inflation

The inflation of imported goods was 6.1% (up from 5.6% last month), while the inflation of local goods was 12.1% on average (up from 11.5% last month).

Month-on-month inflation for imported goods was 0.3% and for locally produced goods 1.1%.

On average in 2020, year-on-year inflation for imported goods was 11.8%, which is more than double the average year-on-year inflation in 2020 for imported goods (5.3%). Especially in the second half of 2020, local goods recorded higher rates of inflation than imported goods.

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