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May_inflation_jumps_to_9.3Current statistics on the Consumer Price Index (CPI) released by the Ghana Statistical Service (GSS) show inflation rose for the third consecutive month in May 2012, confirming fears that price pressures have risen in the economy due to the weak cedi.

The rate for May stood at 9.3 percent, an increase of 0.2 percentage points from the April figure of 9.1 percent.

The rate of inflation has edged up continuously over the last three months, from 8.8 percent in March 2012 to the current rate.

Before then, inflation had remained relatively stable since May 2011, with rates ranging between 8.9 and 8.8 percent.

“The third consecutive rise in inflation is driven generally by non-food inflation, which recorded an average rate of 11.9 percent while the food-group average stood at 5.0 percent.

“The main contributors to non-food inflation were clothing and footwear, transport, furnishings, and household equipment,” Dr. Philomena Nyarko, acting Government Statistician, told journalists at a media conference in Accra.

Dr. Nyarko said six sub-groups in the non-food basket recorded year-on-year inflation rates above the group’s average, with transport recording the highest rate of 20.1 percent. Alcoholic beverages, tobacco and narcotics inflation shot up to 16.5 percent.

She said local food products were responsible for the low inflation in the food and non-alcoholic beverages group.

Bread, cereals and fish sub-groups were the major contributors to the May food inflation rate of 5.0 percent.

“We know that petrol prices, electricity and others haven’t been increased, and so inflation there is zero. So to get an increase of 2 percent in a month is quite high, especially compared to advanced countries where even 2 percent in an entire year is regarded as high,” said Magnus Ebo Duncan, Head of Economic Statistics at the GSS, referring to the 2 percent month-on-month inflation rate recorded in May.

“If you look at clothing and footwear, the inflation is mostly due to imports because most of these goods are imported and thus the exchange rate has had an upward effect on them. If you take transport, for instance, you will see that it has been increasing but transport fares, petrol price and others have remained the same.

“This is because there are other components in the transport sector like tyres, bicycles and others which are also imported, and so the exchange rate has an effect there,” he said.

Year-on-year inflation rates at the regional level ranged from 5.6 percent in the Upper East and West Regions to 12.4 percent in the Central Region.

Central, Ashanti and Greater Accra Regions recorded inflation rates above the national average of 9.3 percent.

Source: myjoyonline.com

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