Drop in inflation rate only means prices are increasing at a reduced pace – John Kwakye

The Director of Research at the Institute of Economic Affairs (IEA), Dr John Kwakye, has said that the recent drop in Ghana’s inflation does not mean prices of goods and services are coming down.

He explained that it only means that the rate at which the prices are increasing has slowed.

“Let’s be clear that a drop in inflation is not the same as a drop in prices. It only means prices are increasing at a reduced pace. That explains why the cost of living remains astronomically high in spite of declining inflation,” he wrote on X.

The inflation rate for the month of June has dropped to 22.8 percent, the Government Statistician, Professor Samuel Kobina Anim, announced.

Prof Anim stated that the drop represents a decline of 0.3 percentage points from that of the month of May which was at 23.1 percent.

He said this at a press conference in Accra on Wednesday, July 10, 2024.

“The year-on-year inflation for June 2024 stood at 22.8 percent, signalling that between June 2023 and June 2024, the prices of goods and services went up by 22.8 percent. This rate of inflation indicates a slowdown by 0.3 percentage points on a month-on-month basis as the rate for May 2024 stood at 23.1 percent,” he said.

Inflation rate drops in June to 22.8%

Four divisions recorded an inflation rate higher than the overall inflation of 22.8 percent.

Alcoholic Beverages, Tabacco and narcotics recorded 32.3 percent, Restaurants and accommodation services recorded 30.7 percent, Housing, water, electricity also had 26 percent while and food and non-alcoholic beverages recorded 24 percent higher inflation than the overall rate of inflation of 22.8 percent for June 2024.

Prof. Anim added that “the Upper East region recorded the highest rate of inflation with 35.20 percent, with the Oti region recording a rate of 12.5 percent.”

He further stated that “The question on the exchange rate is always an important one that is why we have provided a trend analysis from June 2023 to June 2024. The dominance of the inflation on imported items can be aligned to the exchange rate stability.”

 

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