54.1% inflation rate scary; BoG may have to respond by increasing PR – Ato Forson

Ranking Member on the Finance Committee of Parliament Dr Cassiel Ato Forson has described the current inflation rate of 54.1 per cent as frightening.

In his view, the central bank, the Bank of Ghana (BoG) may have to respond to this upward trend by increasing the policy rate which is currently 27 per cent.

The Ghana Statistical Service (GSS) on Wednesday January 11 announced that the rate of inflation for December 2022 was 54.1 per cent, up from the 40.4 per cent recorded in November same year.

The month-on-month inflation rate was at 3.8% in December 2022.

According to the figures, five divisions recorded inflation rates higher than the national average.

Housing, Water, Electricity, Gas and Other Fuels (82.34%); Furnishings, Household Equipment (71.52%); Transport (71.42%); Personal Care, Social Protection and Miscellaneous Goods and Services (60.94%) and Food and Non-Alcoholic Beverages (59.71%).

Whilst Food inflation went up by 4.4% in December 2022, Non-Food Inflation went up to 49.9% in December 2022, from 46.5% in November 2022.

Inflation for locally produced items was 51.1% and inflation for imported items was 61.9%.

Eight sub-classes registered inflation rates higher then the food inflation average. They included Water (94.2%), Fruit and Vegetable Juices (84.6%), Milk, Other Diary Products and Eggs (82.2%) and Tea, Mate and Other Plant Products for Infusion (77.7%).

Commenting on this in a tweet, Dr Ato Forson who is also lawmaker for Ajumako-Enyan-Essiam said “This is getting scary, Bank of Ghana may have to respond with an increase in monetary policy rate!”