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Inflation Up 8.4%

The country’s inflation rate marginally increased from 8.39 per cent in July to 8.4 per cent in August 2011 as a result of continuous pressure from the non-food group.

The August inflation rate, which represents a 0.02 per cent rise from July’s figure, is now the highest in the past five months.

Yearly inflation measures the percentage rate at which the general price levels of goods and services in the country change over the last 12-month period.

Inflation rate has been stable at a single digit since June 2010, hovering around 8.39 per cent and 9.52 per cent.

Monthly inflation, which measures the average percentage change in the prices of goods and services within a month, however, declined to negative 0.70 per cent, the lowest drop in nine months.

Announcing the August 2011 inflation rate at a news conference in Accra, the Government Statistician, Dr Grace Bediako, said the rise in the yearly rate was mainly due to pressure from the non-food group.

She said although the inflation rate for the non-food group had been falling since June 2011, the group continued to serve as the major “contributor to the upward pressure on the general price levels of goods and services in the country”.

She would, however, not say if the said pressure from the non-food group would continue on the entire inflation basket and consequently cause the rate to resume an upward trend.

“A lot depends on what happens to the food group. The non-food group’s upward pressure can be contained by a possible downward pressure from the food and non-alcoholic beverages group for the figure to remain same or even continue going down,” she said, adding that the reverse could happen for an upward trend to resume.

The non-food group has the highest combined weight of 55.9 per cent on the entire inflation basket, which is grouped into food and non-alcoholic beverages group and the food group.

According to Dr Bediako, the transport sub-group recorded the highest rate of 23.02 per cent within the non-food group, while the communications sub-group recorded 0.41 per cent, the lowest in that group.

In the food and non alcoholic beverages group, she said the sugar, jam, honey, syrups, chocolate and confectionery sub-group recorded the highest rate of 15.31 per cent.

The Greater Accra Region, according to the Government Statistician, maintained its position as the region with the highest regional inflation rate after recording a 10.88 per cent rate for August.

The Northern Region’s negative 1.30 per cent was, however, the lowest in the regional August 2011 inflation outlook.

Responding to claims by the Institute of Statistical, Social and Economic Research (ISSER) that inflation data released by the GSS had been erroneous, Dr Bediako said “the fact that we have zeros in our data does not mean that the results of the data are wrong”.

“In inflation computation, zeros mean the item was not found; it was not there at the time of the research and would not be used in the computation,” she added, and wondered why the institute would describe as erroneous inflation figures released by the GSS just because the statistics contained zeros.

The ISSER last week referred to the GSS inflation data as misleading, a criticism which trailed an earlier one by the opposition New Patriotic Party (NPP) which described the GSS figures as “cooked”, using the presence of zeros in the data as additional proof of its claim.