Inflation Rises to a Five Month High in March

The local unit’s struggles against some of its international trading partner currencies coupled with soaring food prices on the back of delayed harvest pushed up the annual inflation rate to its highest in five months as inflation on both local and imported items trended upwards. Data released by the Ghana Statistical Service has revealed that three out of the top five individual items with the highest inflation numbers were local food items with inflation rates above 50.0%.

A slowdown in the month-on-month inflation print failed to calm the upward pressures on consumer goods and services as the annual inflation print inched up from 23.2% in February to close the first quarter of the year at 25.8%. Between February and March, the inflation rate slowed to 0.8% from 1.6% in February. The Cedi’s struggles which have so far sustained a year-to-date depreciation of over 8.0% combined with hikes in the prices of petroleum products are expected to continue to mount upward pressures on consumer prices.

Food inflation recorded its first uptick in eight months, climbing up from 27.0% in February to print at 29.6% in March, its highest since November 2023 as some food items such as Cocoa drinks at 58.1% and Tea & plant products at 75.4% continue to record high inflation numbers. Month-on-month food inflation, however, eased down from 2.0% in February to 1.0% in March supported by deflation in Cereal products, Milk & other dairy, and Fruits & nuts.

The non-food inflation category followed a similar trend as observed in the food inflation category with the annual non-food inflation recording a jump from 20.0% in February to 22.6% in March whilst the month-on-month inflation reading dipped from 1.3% in February to 0.7% in March. Five, led by Alcoholic beverages at 41.0% and Personal care & miscellaneous goods at 33.5%, out of the twelve sub-group items recorded numbers higher than the group’s average.

Across the regions, the inflation rate hovered between 14.3% in the Oti region and 42.9% in the Upper East region. Inflation on both local and imported items saw increases from 24.6% and 20.1% in February to 26.6% and 23.8% in March respectively.

While the recent inflation print supports the central bank’s warnings of the prevalence of inflationary pressures, it is expected the bank will continue to monitor the inflation trend before reinforcing its tightening stance.