Hike in transport fares pushes inflation up to 13%

The 15 percent increment in transport fares by the GPRTU in April has pushed inflation up slightly to 13 percent from 12.8 percent in March, the Ghana Statistical Service has announced.

“The rise in inflation rate from 12.8 in March to 13 percent in April 2017 was mainly due to the rise in inflation rate for the transport group,” Government Statistician, Baah Wadieh, told a press conference yesterday.

“It went up by 9.6 percentage points. We have communications also inching up slightly by 0.1 percentage point and miscellaneous goods went up by 0.1 percentage point. So, these are what accounted for the rise in the inflation rate.”

The monthly change rate for April 2017 was 1.6percent compared to the 1.3percent recorded for March 2017.

Analysis of the figures shows that the non-food group recorded a year-on-year inflation rate of 16.3 percent in April compared to 15.6 percent in March. Five subgroups recorded year-on-year rates higher than the group’s average.

Transport topped with a rate of 24.9 percent, followed by recreation and culture with 22.3 percent, whilst furnishing, household equipment and routine maintenance also recorded 21.9 percent.

The food and non-alcoholic beverage group also recorded a year-on-year inflation rate of 6.7 percent, a 0.6 percentage point higher than the March rate.

The main price drivers for the food group were fish and sea food, which recorded 13.6 percent; meat and meat products also recorded 10.9 percent, and coffee, tea and cocoa recorded 7.2 percent.

The year-on-year inflation rate for imported items also hit 15 percent, 2.8 percentage points higher than that of locally produced items of 12.2 percent.

Commenting on how this impacts the economy, President of the Institute of Chartered Economists, Daniel Anim-Prempeh, said any effects will be marginal, although he argued managers of the economy to be on the alert.

“The very moment it was announced that transport fares had been increased, it was expected that inflation will go up. What it means is that there is the likelihood that the prices of basic commodities will be increased since the transportation component is factored in pricing. However, the impact is going to be mild.

It is a clear signal for managers of the economy to open their eyes and put in measures that will ensure that at the end of the day inflation is at an appreciable level,” Mr. Anim-Prempeh told the B&FT in an interview.

Source: Business & Financial Times Ghana