True to the analysts’ speculations, the persistent increase in the world crude prices in the last quarter of 2007 translated into significant increases in the general prices of goods and services on the Ghanaian market, making the projected 2007 year-end single digit inflation a mirage. The annual rate of inflation for December 2007 was 12.7%, a 1.3 percentage point increase over the comparable figure for November 2007 which stood at 11.4%. The national consumer price index increased by 4.10 points between November and December 2007, that is from 225.69 to 229.79 respectively. Speaking at a press briefing in Accra last Friday, the Deputy Government Statistician, Prof N.N.N. Nsowah Nuamah explained that the rise in inflation for December resulted from the higher spending patterns of the consumers during the Christmas festivities. According to him, significant changes occurred in the prices of such items as fats and oils, chicken, eggs, rice, beverages, tomatoes, transport, clothing and footwear. The rate for December is the highest since January 2007. Year 2007 started with an annual rate of inflation of 10.9% respectively. And just when many expected to see further reduction in the rate in pursuit of single digit figures, inflation for April and May bucked the downward trend, rising to 10.5 and 11.0 respectively. These increases were attributed to the planting season, during which time most staples are in scarce supply. The rate fell to 10.7% in June and to 10.1 in July before moving up 0.3 percentage points to 10.4% in August. September 2007 recorded an annual rate of inflation of 10.2% whilst the corresponding figure for October was10.1%. Inflation for November 2007 was 11.4%, a jump of 1.3 percentage points over the October 2007 figure, and this was attributed to the upward adjustment in prices of petroleum products and the resultant increase in transport fares as well as utilities. The average annual inflation rate for December 2007 was 10.73% against government’s projected 8.8% for the year under review. He noted that the non-food groups contributed 2.24 points whilst the food and the beverages groups contributed 1.86 points to the change in national index. Prof Nsowah Nuamah related that within the non-food groups, the housing, water, electicity, gas and other utility group and transport group contributed the highest upward points of 0.89 points and 0.67 points. Citing other items that contributed positively under the non-food group, he indicated that kerosene added up 0.74 points to the index, intercity bus fares 0.24 points and taxi charges 0.22 points. Liquefied Petroleum Gas and charcoal contributed 0.08 points and 0.03 respectively. He said the Furnishing, household equipment and health groups contributed negatively to the change in national index with -0.12 points and -0.06 points respectively. He however stated that the communication and education groups did not contribute anything to the change in the national index. Within the food and beverage group, the statistician explained that milk, cheese and eggs sub-group was the highest positive contributor, adding up 0.55 points to the change in national index. He added that oils and fats, bread and cereals and fish contributed 0.33, 0.32 and 0.27 points respectively. Prof Nsowah Nuamah added that Chicken, egg, palm oils, milk and coconut oil contributed 0.49, 0.24, 0.04 and 0.03 points respectively. On regional analysis, the statistician said the Ashanti Region recorded the lowest annual inflation rate of 10.85% followed by the Volta Region which recorded 10.98%. The Eastern and Northern regions on the other hand recorded the highest changes in the prices of goods and services, recording 16.93% and 15.98% respectively. Government targets an end period inflation rate of between 6 and 8% and an average inflation rate of 7 percent for the year 2008. Threats from persistent increases in the world crude prices, recent hikes in utility prices and the expected increase in the government spending for an election year make several analysts doubt the liability of these targets. Source: Ghana Market Watch