This represents a 0.3 percent rise in the inflation rate compared to the January 2018 inflation of 10.3 percent.

Inflation measures the average change over time in the general prices of goods and services purchased by consumers within a particular period of time.

The Acting Government Statistician, Baah Wadieh attributed the increase to the marginal rise in prices of some food items and marginal increase in fuel prices in February.

“We have inflation for non food items like transport, communication, housing, water, electricity among others as well as that of the broad group of foods, also going up. But the underlying factor is largely due to the base drift effect and the slight increase in fuel prices in February,” he explained.

In a related development, the inflation for food groups such as fruits and vegetables, meat and meat products, went up to 7.2 percent.

While inflation for non-food items such as transport, utility, education, among others went up to 12.2 percent.

Meanwhile the Upper West recorded the highest inflation of 11.7 percent with the Upper East region recording the lowest inflation rate of 8.1 percent.

–

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Inflation increases to 10.6% in February appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to him the high prices of goods on the market are reflective of the high costs of production which are the results of the low levels of production as well as the inflated costs of raw materials.

[contextly_sidebar id=”xCTDrV8bmlGsbAyuxL7YWqTpJoO2SOsC”]“Ghana is a high inflation country, largely because our productivity level is very low, which then tends to increase the unit cost of production. So whatever we produce, because the productivity is low, the production cost is high, costs of raw materials are high, so definitely it will eat into our final pricing,” Dr. Osei-Assibey said yesterday [Thursday].

He also noted that the increased preference of Ghanaians for imported raw materials for production and the depreciation of the cedi was driving up the cost of production.

“Our currency is weak compared to other currencies in neighbouring countries and once you have a weaker currency and you depend so much on imported raw materials, it goes to increase your production cost. Despite the fact that you have low wages due to excess labour, other factors are very high and that pushes up transaction costs and production costs,” he added.

Silver lining?

Despite these challenges, the government has been quick to tout its achievements in managing the economy and the gains attained despite the fact that it had inherited an economy in dire straits.

As evidence of the progress of the economy, President Akufo-Addo, delivering the State of the Nation address in February, cited the strong trajectory of the Ghana Stock Exchange Composite Index in January 2018, which gained 19 percent in dollar terms, according to benchmarks tracked by Bloomberg.

The World Bank has also projected that Ghana’s economy will probably grow by 8.3 percent this year, which will be the fastest in the world in 2018.

The President expects these improving macroeconomic indicators to usher Ghana out of the International Monetary Fund programme later this year after his administration extended the 2015 programme.

“The good macroeconomic performance in 2017 will strongly support our successful completion of the IMF programme. We are determined to put in place measures to ensure irreversibility and sustained macroeconomic stability so that we will have no reason to seek again the assistance of that powerful global body.”

Beyond the strong economic indicators, President Nana Akufo-Addo said his economic management team had found imaginative ways to deal with the “oppressive debt situation” bringing relief to the country and rebuild the “annual average rate of debt accumulation as reduced from a high of 36 percent to 13.6 percent as at September 2017.”

“As a result of appropriate policy and the normalization of power situation in the country, [we]  have also engineered a spectacular revival of Ghanaian industry from a growth rate of negative 0.5 percent in 2016, to 17.5 percent in 2017,” he added.

President Akufo-Addo was, however, keen to stress that, the gains made on the economy from did not mean Ghana was out of the woods.

–

By: Edwin Kwakofi/citifmonline.com/Ghana

The post High living costs due to low productivity, import dependence – Economist appeared first on Citi 97.3 FM - Relevant Radio. Always.

Headline inflation surprised when it fell sharply in January to 10.3%; year on year from 11.8% in December.

This was well below our expectations for a marginal increase to 11.9%, largely owing to base effects.

The deceleration in inflation will have been positively received by the Bank of Ghana’s MPC, which was concerned about underlying inflationary pressures at the January meeting.

It suggests that there is room for a resumption of policy easing at the March meeting.

Inflation fell sharply to 10.3% year on year in January from 11.8% in December as inflationary pressures moderated though base effects largely underpinned the decline. 

Month-on-month, inflation was 1.4% in January compared with 2.8% in January 2017.

Non-food inflation fell to 12.0% year on year from 13.6% in December 2017 following more subdued increases than is the case normally in January for several larger categories, including clothing & footwear, utilities and transport.

As a result, inflation for these components fell on a year-on-year basis in January, with the most noticeable decline being that of utilities, which fell from 9.1% in December to 7.5% in January.

Similarly, food inflation, despite rising by 2.1% month on month (3.3% in January 2017), fell from 8.0% year on year in December to 6.8% in January as several sub-categories saw inflationary pressures ease.

January’s inflation print takes inflation closer to the 8% +/-2pp target range. 

The Bank of Ghana’s MPC will be welcoming of the sharp drop in inflation to close to the upper limit of the target range after it expressed concern about rising underlying inflation at the January MPC meeting.

At the time, the committee unexpectedly kept its policy rate unchanged to “ensure that the inflation target horizon is maintained” and the target range is achieved.

With the outlook for the currency bullish given it is likely to be well supported by strong inflows, we expect inflation to dip into the target range by Q2 18 and remain in single digits for the remainder of the year.

The central bank revealed in January that its weighted inflation expectations by business, consumers and the financial sector declined in December and we expect expectations to decline further in the coming months.

We expect the lower inflation print in January to see a resumption in policy easing as soon as the

March MPC meeting. 

Unless there is some upside shock to the February inflation print, which we do not anticipate, there is little reason to further delay additional policy easing at the March meeting.

The committee has so far been very cautious but we see scope for at least another 400bp in rate cuts over the next few months.

Looking at the local debt market, today’s inflation print, along with the likelihood of further policy rate cuts, suggests a continuation in the decline in yields.

That said, with yields having already fallen steadily in recent months, further downside may be limited.

–

Source : Barclays Africa Group

The post Declining inflation to trigger lower policy rate [Article] appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to the ICU, this will ensure that employers are able to sustain jobs and also absorb some of the teeming unemployed youth in the country.

The Finance Minister, Ken Ofori-Atta during the 2018 budget presentation, announced that government is targeting a medium term (2018-2021) inflation rate of 8±2 percent, lower than the 11.2 percent targeted for 2017.

Speaking to Citi Business News, the General Secretary of the Industrial and Commercial Workers Union (ICU), Solomon Kotei said government needs to fulfill its promises including that of reducing inflation in 2018, since it had the whole of 2017 to plan and project.

“We see 2018 as a year that should come with fulfillment of governments’ promises. Inflation should remain where it is or better yet continue going down. This will make it possible for businesses to sustain jobs and employ more,” he stated.

Figures from the Ghana Statistical Service indicate that inflation has been on the decline since September 2016.

The figure has fallen from 17.2 percent in September 2016 to 11.7 percent as at November 2017.

The declining inflation trends come on the back of stable electricity supply coupled with tight policy stance, which has also largely accounted for the sustained stability in the local currency.

As part of projections for the 2018 fiscal year, the government has projected an average inflation rate of 9.8 percent and end year inflation of 8.9 percent for 2018.

In line with the medium-term policy objectives of the government, monetary policy is expected to continue to provide an anchor for inflation expectations and steer inflation towards the medium term target band of 8 ±2 percent.

While achieving this target can encourage savings and investments-as returns on investments are preserved, provision of a stable and reliable electricity supply, continuous stability of the Ghana cedi among others will be key.

–

By: Bobbie Osei/citibusinessnews.com/Ghana

The post ICU pushes for low inflation to sustain jobs appeared first on Citi 97.3 FM - Relevant Radio. Always.

Though inflation was projected to be 10.1% by the end of 2016, it rather shot up to 15.4%. Other key economic targets that could not be realized were the real GDP, budget deficit and fiscal balance. Study the infographic below to get the full details.

–

By: Marian Ansah/citifmonline.com/Ghana
Follow @EfeAnsah

The post NDC missed macro economic targets for 2016 [Infographic] appeared first on Citi 97.3 FM - Relevant Radio. Always.