Inflation Rate Plunges to its Lowest in Nearly One Year

Following months of persistent increases in the consumer price index as the domestic economy experienced renewed upward price pressures buoyed by hikes in utility tariffs amid increases in the prices of petroleum products, the inflation rate recorded its steepest decline in four months in August according to the latest price data released by the Ghana Statistical Service. The data revealed that the annual inflation figure plunged the most by 300 basis points from 43.1% at the start of the second half of the year to print at 40.1%, the least since September 2022.

The data further revealed that at least ninety percent of the observed inflation items recorded decreases between July and August. This was supported by the month-on-month inflation rate which recorded a deflation at 0.2%, the slowest over the past five months. The data similarly revealed that for the very first time in 2023, inflation on imported items was much calmer compared to that on local items as the Cedi remained relatively stable in the month of August.

After months of persistent pressures on the prices of food items, the inflation rate on food and non-alcoholic beverages declined from a high of 55.0% in July to print at 51.9% in August. Month-on-month food inflation followed suit with a deflation figure of 0.3%, haven declined from 3.8% in July. The sharp decline in the inflation for food items was led by Oils & Fats which came in with a month-on-month deflation of 2.3% and Tea & related products with a rate of -1.9%.

Inflation on non-food items recorded an annual inflation rate of 30.9% in August, down from 33.8% in July. Month-on-month non-food inflation slowed down to record a deflation of 0.2%. At least 60% of the items in the non-food inflation basket witnessed a deflation in its month-on-month inflation prints, with education leading at -2.8%.

Across the regions, the inflation rate ranged between 31.8% in the Greater Accra region and 60.1% in the North East region. Inflation on imported items underwent a sharp decline to print at 36.2%, surpassing that on imported items which printed at 42.4%.

It is expected that the recent development in the consumer price index will force a monetary policy stay at the central bank’s next sitting due later in the month.