Inflation will go up again in September 2022, Head of Insights of investment bank, I C Securities, Courage Martey, has disclosed.

This follows a 2.2% increase in the year-on-year inflation to 33.9% in August 2022.

According to him, the increase in utility tariffs which took effect from the beginning of this month will trigger a surge in inflation, a situation which will impact heavily on consumers.

Mr. Martey tells Joy Business the situation will not change soon because the average price of necessary goods, particularly food and rent have gone up significantly.  

He pointed out that the increase in utility tariff which took effect from September 1, 2022 will push inflation up in the month of review.

“Inflation will go up again because utility tariffs if you disaggregate the non-food component, it carries the biggest weight of over 10%. You find out that it carries more than just water, electricity and other fuels”.

“So not only do you have energy [transport] prices, you also have electricity and water tariffs - all together - carrying a bigger weight in the inflation basket”, he added.

Historically, the rate of food inflation has been far lower than non-food inflation. However, the situation is not the same as today because of the Russian/Ukraine war which has triggered increases in foodstuffs such as flour, rice, wheat and cooking oil.

Mr. Martey said “on this particular occasion we are not so bullish on the quantum of food harvest and the situation has been worsened by the utility tariff hikes”.

He added “inflation is very high for necessities looking at the basket [inflation] now. In that case individuals and institutions are spending more on necessary kids. The rising inflation will obviously push interest rate up to compensate investors.”

Transport, housing, food among drivers of September 2022

The drivers of the September 2022 inflation were Housing, water electricity, gas and other fuels (46.7%); Transport (45.7%); Furnishings, household equipment and routine household maintenance (44.7); Recreation, sport and culture (36.4%); Personal care, social protection and miscellaneous goods and services (36.0%) and Food and Non-Alcoholic Beverages (34.0%).

There was however wide disparity observed across the 13 divisions.

Food inflation in the month of August 2022 was 34.4%, compared with 32.3% the previous month.