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Bawumia Further Vindicated As GSS Backtracks and Changes Inflation Calculation   
 
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01-Jun-2012  
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Dr. Mahamadu Bawumia
 
 
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In a rather Surprising move following the visit of an International Monetary Fund (IMF) Working Mission to Ghana which virtually backed NPP Running Mate Dr. Mahamudu Bawumia, the Ghana Statistical Service (GSS), has suddenly decided to change the calculation of inflation by rebasing the Consumer Price Index (CPI) which is used for calculating inflation.

The new base year to be used in the calculation of inflation would be 2011. This change is to apparently provide a more accurate reporting of inflation.

The changes in the measurement would also see the inflation basket of goods increase from 242 to over 270 goods.

Speaking to XYZ Business, Head of Economics and Statistics Department at the Ghana Statistical Service, Magnus Ebo Duncan who disclosed these changes stated that With time people tend to spend a lot on one item than the other. There are shifts in the consumption patterns and expenditure patterns. So these, together, will influence the new figures that comes out.

According to experts, normally, such changes in base years are the result of consumer expenditure surveys but it unclear if the Ghana Statistical Service has undertaken such a survey to warrant such a change.

It will be recalled the NPP's Vice Presidential Candidate, Dr. Mahamudu Bawumia recently caused an uproar when he stated during his presentation at the Ferdinand Ayim Memorial Lectures that the rate of increase in the cost of living in Ghana among other fundamentals like the depreciation of the cedi were not consistent with reports of single digit inflation.

He stated at the lecture, The key question that is on the minds of many Ghanaians is: Do we really have single-digit inflation in Ghana today? While I do not want to argue with or question the integrity of our hard working officials at the Ghana Statistical Service who do a good job under very difficult circumstances, and should indeed be resourced (and given more independence) to do the work they do, I will like to state that the available evidence indicates that statistically reported single digit inflation is not consistent with the economic fundamentals and developments in some key economic indicators relating to the cost of living, interest rates and exchange rates. It could be a measurement issue, but the established relationships between inflation and key economic variables appear to have gone missing for now.

What is interesting as seen in the quote provided is that Dr. Bawumia in the lecture pointed out that the problem may have been a measurement issue.

However in a quick rebuttal, the Acting Director General of the Ghana Statistical Service, Dr. Philomina Nyarko came out to defend the inflation data and the NDC government in the process and cast a lot of aspersions, following in the trend of government communicators and Pro-NDC Press who launched various attacks on Dr. Bawumia after the lecture.

The questions the GSS would have to answer is why the sudden change in the measurement variables in just some weeks after Dr. Bawumia delivered his lecture and whether the GSS is now admitting that they have not been capturing the right inflation data.
 
 
Source: Peacefmonline.com
 
 

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