Data from the Ghana Statistical Service (GSS) indicates that locally produced items significantly drove inflation in June, outpacing the impact of imported goods despite the depreciating cedi.
In June, locally produced items accounted for 67% of inflation, while imported items contributed only 33%. This marks an increase from May, when locally produced items were responsible for 56.3% of inflation, compared to 43.7% from imported items.
This shift highlights the growing influence of locally produced goods on inflation.
Despite the cedi’s over 20% depreciation on the retail market, which might suggest imported items would drive inflation, the data suggests otherwise.
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This supports the notion that local production costs are higher than importing goods, reflecting the high cost of doing business in Ghana compared to countries where imports originate.
Specifically, locally produced food items alone accounted for 43.5% of inflation, while imported food items contributed only 10.6%. The gap between locally produced non-food items and their imported counterparts was narrower, with locally produced non-food items accounting for 23.5% of inflation, compared to 22.4% for imported non-food items.
Notably, in May, imported non-food items had a greater impact on inflation, contributing 34.5% compared to 27.7% from locally produced non-food items.
In terms of the rate of increase, inflation for locally produced items stood at 25%, compared to 17.5% for imported items, a difference of 750 basis points. This contrasts with a 510 basis points difference in May.
Furthermore, among the 20 items with the highest inflation rates, ranging between 37.9% and 87.8%, only two were imported, while the remaining 18 were locally produced. This further underscores the dominance of locally produced items in driving inflation in June.
The average national inflation rate was 22.8% in June, down from 23.1% in May. However, the month-on-month inflation rate between May and June was 2.9%, indicating higher price levels in June compared to May 2024.
