Inflation Begins Last Quarter on a Declining Trajectory

Ghana’s inflation extended its downward trajectory into the final quarter of the year as cooling food prices supported by stable prices of petroleum products drove the downward trend in the consumer price index. Data released by the Ghana Statistical Service revealed that the inflation rate notched down to its lowest in fourteen weeks to print at 35.2% in October, having declined from 38.1% as at the close of the third quarter of the year.

Month-on-month inflation similarly recorded a decline from 1.9% in September to print at 0.6% in October, the third lowest figure recorded so far in 2023. The steady decline in the inflationary trend is broadly in line with the Government’s hope of achieving a revised end-period inflation target of 31.3% as contained in the 2023 mid-year budget review.

Food inflation continued its downward trajectory for the third consecutive time to print at 44.8% in October, down from 49.4% recorded in the previous month. The decline was supported by a significant drop in the month-on-month food inflation which eased down from 1.6% in September to print at 0.1% in October. Fruits & nuts and vegetables & tubers with deflationary figures of 2.4% (m-o-m) and 1.0% (m-o-m) respectively lead the decline in the food inflation figure.

The non-food inflation basket with a weight of 57.3% saw a decline to 27.7% in October, down from 29.3% in September as more than half of the divisions in this category recorded figures lower than the group’s annual inflation figure. Alcoholic beverages at 45.7% and personal care & miscellaneous goods at 45.0% were among three others with figures above the group’s annual rate. Month-on-month non-food inflation dipped by 110 basis points to print at 1.0% in October.

Across the regions, the inflation rate ranged between 28.5% in the Savannah region and 47.5% in the North East region. Inflation on both locally produced and imported items recorded similar margins of decrease by 290 basis points to print at 34.4% and 37.0% in October respectively.

The last sitting of the central bank’s Monetary Policy Committee due later in the month will be expected to set an appropriate policy rate in line with the government’s efforts to get the economy back on track. The committee will be expected to position the policy rate taking into account a careful balance between the recent decline in inflation and a surge in economic activities as the year draws to a close.