Inflation Rate Breaks Through 50.0%

The inflation rate in November hit a historic level, breaking past the 50.0% level, as it rose to its highest in more than twenty-five years. The ongoing pressures on the prices of consumer goods and services pushed the inflation rate to record its eighteen consecutive jumps, with the annual inflation figure climbing from 40.4% in October to print at 50.3% in November. Month-on-month inflation rate saw a significant jump, as the general prices of goods and services between October and November sustained an 8.6% increase.

Consumer prices saw significant increases in November following the continuous sharp depreciation of the local currency against some of its major trading partner currencies and as the prices of gasoil shot up to more than GHC 20.0 at some service stations triggering an upward adjustment in transport fares. November’s inflation figure was also driven by a strong pickup in the prices of some local products as groundnuts and palm oil came in among the top three items with the highest inflation figures with inflation figures of 134.3% and 124.9% respectively.

Annual food inflation went up from 43.7% in October to print at 55.3% in November. Food inflation averaged 31.3% in the eleven months to November. Month-on-month food inflation in November hit 10.4% compared to a 2022-year low of 1.8% in August. The biggest price driver of food inflation was water with an annual inflation of 93.2% and a monthly inflation figure of 18.3%.

Non-food inflation averaged 28.0% in the eleven months to November after climbing from 37.8% in October to print at 46.5% in November. Month-on-month non-food and alcoholic beverages inflation rose from 2.3% in October to 7.2% in November. Housing & utilities at 79.1% led the annual non-food inflation chart whilst Transport posted the biggest monthly rate at 12.8%.

Across the regions, the rate of inflation hovered between 34.9% in the Northern region and 63.3% in the Eastern region. Inflation on imported items continued its dominance over that on local items as the gap between inflation on imported and local items widened to 6.8% from 4.6%.

The last Monetary Policy Committee meeting saw a 250 basis points jump in the policy rate as the committee renewed its hard stance against red-hot inflation numbers with the committee further warning of the prevalence of upside risks to the inflation outlook.