Inflation Ends Half Year on an Upward Trajectory

In line with expectations, the consumer price index edged up in June from the level seen in May as the pass-through effects of the recently announced upward adjustments in utility prices mount pressure on consumer prices. A Cedi struggling to maintain stability against some of its major trading partner currencies also contributed to the renewed upward price pressures on consumer goods and services, with food and non-alcoholic beverages hardest hit. The inflation data released by Ghana Statistical Service (GSS) revealed that the annual inflation rate climbed up marginally in June to print at 42.5% from 42.2% in May, the second of such increase after inflation touched a 2023 mid-year low of 41.2% in April.

The release from GSS also revealed that despite the uptick in the annual inflation figure, the month-on-month inflation rate slowed down from 4.8% in May to end the first half of the year at 3.2% supported by a similar downward trend in the month-on-month readings for both food and non-food inflation items.

Annual food inflation increased for the second consecutive time despite a decline in the month-on-month inflation reading. Annual inflation for food items rose from 51.8% in May to print at 54.2% in June as tea & other plant products recorded a 133.6% inflation over the past year. Month-on-month food inflation declined from 6.2% in May to 3.9% in June.

Inflation on non-food items extended its downward trajectory for the fourth consecutive time, declining to 33.4% in June from 34.6% in May as most items in the non-food inflation basket recorded stable prices in the period under review. Month-on-month inflation on non-food items declined to 2.6% in June from 3.5% in May.

Across the regions, the inflation rate ranged between 30.5% in the Greater Accra region to 61.8% in the Western North region. Inflation on local items recorded its sixth successive slide in June declining to 35.9% while that on imported items recorded a second successive increase to 44.5%.

The July sitting of the Monetary Policy Committee is expected to witness the central bank resuming its policy hikes after inflation rose for the second consecutive time since the last MPC meeting in May.