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Inflation rate in May slows to 7.5% year-on-year

Inflation rate in May slows to 7.5% year-on-year
LISTEN JUN 9, 2021

The year-on-year inflation rate fell for the second month in a row at 7.5 percent in May from 8.5 percent in the previous month on lower food inflation.

Month-on-month inflation between April and May 2021 was 0.8 percent, which was 0.7 percentage point lower than what was recorded in April.

“One year ago, in May 2020 we observed a peak in inflation at 11.3 percent. Because such a peak did not occur this year, year-on-year inflation is relatively low this month,” Professor Kobina Annim, Government said at a press briefing on Wednesday.

He said the month's Food inflation, which stood at 5.4 percent was both lower than last month's 6.5 percent and the average of the previous 12 months (11.3 percent).

“This further leads to Food inflation decreasing in its contribution to total inflation to 32.3%, the lowest contribution observed since the CPI basket was rebased in 2018,” he said.

Overall month-on-month Food inflation was 1.3 percent, which is above the average month-on-month inflation.

The low Food inflation was driven by negative inflation for vegetables at 3.5 percent.

All Non-Food Divisions recorded positive month-on-month inflation of maximum 1.4 percent. Like Food inflation, Non-Food year-on-year inflation on average went down this month compared to last month from 8.8 percent to 10.0 percent.

Out of the 13 Divisions, 10 had lower or equal year-on-year inflation in May 2021 than the rolling average over the last 12 months.

“Transport is the Non-Food Division that recorded the biggest difference compared to the 12-month average of 11.7 percent compared to 7.6 percent).

“This Transport inflation is driven by the inflation of Diesel (37.7% year-on-year and 10.0% month-on-month) and Petrol (34.0% year-on-year and 8.0% month-on-month).

This relatively high Transport Inflation leads the Transport Division to contribute 16.5% to total inflation, the highest percentage since October 2019,” Prof. Annim said.

The inflation for imported goods was 7.3 percent down from 7.4 percent last month, while the inflation for locally produced items was also 7.3 percent on average down from the 8.7 percent recorded last month.

At the regional level, the overall year-on-year inflation ranged from 2.6 percent in Western Region to 12.3 percent in Greater Accra Region.

Upper West Region recorded the highest month-on-month inflation of 4.3 percent.

Three regions saw a stark decline in Food inflation as compared to last month. Western Region went from 6.5 percent to 0.4 percent, Eastern from 8.2 percent to 4.3 percent, and Ashanti from 9.8 percent to 5.9 percent.

On the other hand, Volta Region saw an increase in Food Inflation for 5.6 percent to 9.8 percent.

---GNA

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