Ghana Inflation hits new high

Ghana’s inflation rate unexpectedly climbed to a peak not seen in four months in July, primarily due to rising food costs. This increase places additional pressure on the central bank to persist with its policy of raising interest rates in the upcoming month.

The annual inflation rate surged to 43.1% from June’s 42.5%, according to Government Statistician Samuel Kobina Annim, who addressed reporters in the capital city of Accra on Wednesday. This figure marks the highest level observed since March. While a Bloomberg survey of five economists predicted a median estimate of 42%, the actual inflation rate surpassed expectations.

The principal drivers behind this acceleration were elevated food prices, as highlighted by Annim. Food-related inflation surged from 54.2% in the previous month to 55% in July, while non-food prices also experienced an uptick, rising from 33.4% to 33.8%. Overall, prices saw a 3.6% increase during the month.

In response to persistent inflationary pressures that were not subsiding quickly enough, the central bank had already raised interest rates by 50 basis points to 30% in the preceding month. This recent hike marked a cumulative increase of 16.5 percentage points since November 2021.

If this upward trend in inflation continues, policymakers might be inclined to implement further rate hikes during their meeting scheduled for September 18-22.

As of 11:04 a.m. in Accra, the Ghanaian Cedi displayed relatively minimal fluctuations, trading at 11.1646 against the US dollar. Additionally, the nation’s dollar-denominated bond maturing in 2032 observed a slight gain of 0.2 cents, reaching 45.1 cents on the dollar, according to the Bloomberg generic pricing data.