Inflation rate rises to 10.9 per cent

Accra, Feb. 16, GNA - Inflation rate in January 2007 based on the new Consumer Price Index (CPI) was 10.9 per cent compared to the December figure of 10.5 per cent based on the old CPI series.

The new CPI series moves the base year from September 1997 to the average prices of 2002 and also revises the weights on the various items in the basket of goods to reflect current expenditure pattern. When these adjustments were used to compute the CPI for December last year, the rate of Inflation remained unchanged at 10.9 per cent between previous month and January this year.

Announcing this on Friday, Professor Nicholas N.N. Nuamah-Nsowah, Acting Government Statistician, said the national CPI for January 2007 was 206.08 points with respect to the 2002 new base year. "It is this index, when compared with that of January 2006 of 185.84 points, that gives the inflation rate, (point-to-point) of 10.9 per cent," he explained.

The monthly change/rate of inflation, which is the CPI of January 2007, compared with that of the previous month December 2006, was 1.1 per cent, whereas the annual average inflation which is the current year's average CPI compared with the previous year's average CPI was 11.5 per cent.

Prof. Nuamah-Nsowah said, apart from the base year and weight, the new CPI series also saw the presentation of the Index being expanded to include indices in the entire 10 regions.

"The classification used for the presentation of the results has also been moved from the traditional one based on the Central Product Classification (CPC) to the new one based on Classification of Individual Consumption ((COICOP)," he said.

He noted that this type of classification had been adopted by the West African Monetary Union (WAMU) as the basis for harmonizing CPI in member countries.

Prof. Nuamah-Nsowah said the 242 goods and services in the CPI had now been classified into 12 major commodity groups and 34 sub-groups. He said the 12 major groups comprising the food and beverages group now carried a weight of 44.91 per cent compared to the old percentage of 51.9. Eleven other non-food groups weighted 55.09 per cent compared to the previous 48.1.

With the overall national CPI increase of 2.27 points from 203.81 in December 2006 to 206.08 in January 2007, the food and beverage group contributed 1.32 percentage points while the non-food groups altogether made 0.95 percentage points.

Fish contributed the highest of 0.27 points from the food and beverage group to the increase in the national index while oil and fats were the lowest upwards contributor with 0.07 points.

Within the non-food group, clothing and footwear contributed the highest upward movement of the index with 0.28 points whilst education had the lowest upward effect with 0.01 points.