Inflation Falls to a 5-Month Low

Expectations of slowing down inflation numbers seem to be becoming a reality with inflation figures over the past three months embarking on a downward trajectory despite the prevalence of upward price pressures on consumer goods and services. Ghana’s inflation rate recorded its third consecutive decline to its lowest since October 2022 as significant declines in the prices of petroleum products as well as the recent traction of the local currency calm the upward price pressures. The annual inflation rate printed at 45.0% in March, down from 52.8% in February.

Month-on-month inflation recorded its first negative rate in thirty months as it ended the first quarter of the year at -1.2%, having eased drastically from a recent peak of 8.6% in November 2022. Although the inflation outlook continues to face the risk of fiscal spillages, crude oil production cuts, as well as the passage of the new tax bills, stable fuel prices and the optimism surrounding Ghana securing an IMF bailout within the first half of the year will be expected to keep inflation relatively stable in the near term.

The annual food inflation was reported at 50.8% in March, down from 59.1% in February. Month-on-month food inflation printed at -0.9% as thirteen out of the observed fifteen sub-items in the food category recorded negative inflation figures with Tea & other plant products and Coffee & coffee substitutes topping the chart at -4.3% and -3.3% respectively.

The non-food category recorded an inflation rate of 40.6% in March from 47.9% in February. On monthly basis, the non-food and alcoholic beverages category recorded an inflation rate of -1.5% in March, having eased from 1.7% in February. Its biggest month-on-month movers were recorded by Housing & utilities at -10.5% and Information & communication at -12.1%.

Across the regions, the inflation rate hovered between 25.6% in the Volta region and 67.3% in the Western North region. Inflation on both local and imported items saw decreases from 49.0% and 62.3% in February to print at 41.9% and 51.6% in March.

At the last Monetary Policy Committee (MPC) meeting held in March, the MPC renewed its tougher stance against inflation with the central bank further warning of the persistence of risks to the inflation outlook.