In Ghana, the most important components in the Consumer Price Index (CPI) are food and non-alcoholic beverages (43 percent of total weight); housing and utilities (10 percent); transport (10 percent), and clothing and footwear (8 percent).
The index also includes education (7 percent); restaurants and accommodations (5 percent); alcoholic beverages, tobacco, and narcotics (4 percent); information and communication (4 percent), and other miscellaneous goods and services all account for the remaining percent of total weight.
Inflation spike in August 2022
Inflation increased to 33.9% in August, following July’s 31.7%. In August, inflation for imported items exceeded domestic inflation for the fifth month running, reflecting elevated global commodity prices and currency depreciation.
Looking at the details of the release, the acceleration was driven by prices for food and beverages, which rose at a faster rate in August compared to other goods. Furthermore, prices for transport, as well as clothing and footwear, increased at a faster clip.
The trend pointed up, with average inflation over the previous 12 months coming in at 20.5% in August (July: 18.4%). Lastly, consumer prices increased by a seasonally adjusted 1.91% in August over the previous month, below July’s 3.15% rise.
Inflation surge in September 2022
Ghana’s annual inflation rate accelerated for the 16th straight month to 37.2% in September of 2022, from 33.9% in August. It was the highest reading since July of 2001, even after Ghana’s central bank delivered another 250 bps rate hike during its October meeting.
Prices of imported goods (40.7%) accelerated faster than domestic items (35.8%), largely due to a weakening cedi. Upward pressure came mostly from prices of housing & utilities (68.8%); transport (46.8%) and food products (36.8%). Monthly, consumer prices increased by 2%.
High hit in October 2022
Ghana’s annual inflation rate accelerated for the 17th straight month to 40.4% in October of 2022, up from 37.2% in September.
It was the highest reading since July of 2001 and well above the top of the central bank’s target band of 6% to 10%, amid a strong depreciation of the cedi during the month.
The recent slide in the domestic currency has been driven by uncertainty over Finance Minister Ken Ofori-Atta’s future after the opposition filed a motion in parliament to dismiss him because of the deepening economic crisis.
The Ghanaian government has been in talks with the International Monetary Fund for a $3 billion loan bailout aimed to address Ghana’s macroeconomic and structural woes.
Inflation for imported items (43.7%) was higher than for locally produced ones (39.1%). Prices accelerated for both food (43.7% vs 37.8% in September) and non-food items (37.8% vs 36.8%). Monthly, consumer prices rose by 2.7%, faster than a 2% increase in the previous month.
Ghana’s inflation hits 50.3%
Ghana’s annual inflation rate quickened for the 18th straight month to 50.3% in November of 2022, up from 40.4% in the prior month.
It was the highest reading since May of 2001 and well above the top of the central bank’s target band of 6%-10%, as the continued depreciation of the cedi during the month raised the cost of imported goods (55.1% vs 43.7% in October.
Principal upward pressure came from prices of housing & utilities (79.1% vs 69.6% in October); furnishings & household equipment (65.7% vs 55.7%); transportation (63.1% vs 46.3%) and food & non-alcoholic beverages (47.9% vs 43.7%).
The International Monetary Fund and Ghana reached a preliminary, staff-level agreement on a three-year funding package worth almost $3 billion on December 13th.
The loan is aimed to restore Ghana’s ailing economy, from unsustainable debts to waning reserves and a witty currency.
