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Year-End Price Pressures Pushes September Inflation to 21.5%

Inflation halted its easing cycle which had persisted over the six months as a resurgence of price pressures pushed the inflation rate to its highest since June 2024 after the inflation rate dipped to its lowest in more than two years the previous month. According to data released by the Ghana Statistical Service (GSS), the rate of inflation rose from 20.4% in August to print at 21.5% in September in what appears to be the start of price build-ups ahead of the festive season and the government is expected to increase its expending with the December polls drawing near.

After sustaining a significant dip in August, the month-on-month inflation reading also registered an uptick, up from a deflation of 0.7% to print at 2.8% in September. According to data released by the GSS, the surprise uptick in the national inflation reading for the month came on the back of substantial hikes in the prices of some food items with Tomatoes and Yam with significant weights recording year-on-year inflation rates of 67.9% and 59.0% respectively.

Food inflation edged up by 300 basis points from 19.1% in August to print at 22.1% in September. Month-on-month inflation underwent a sharp rise from -2.2% in August to 4.2% in September, led by 18.6%, 15.7%, and 7.5% inflation numbers recorded by Fruits & nuts, Milk & other dairy products, and Oils & fats respectively. The biggest price driver for this category was recorded by the Vegetables, tubers & plantains subcategory with a year-on-year inflation rate of 44.0%.

The year-on-year inflation rate for the non-food category slowed to 20.9% in September, down from 21.5% recorded in the previous month. This came on the back of a slowdown recorded by Housing & utilities and Transport with inflation rates of 26.4% and 16.3% from 31.8% and 17.4% respectively in August. Month-on-month inflation for this category, however, recorded an increase from 0.7% in August to 1.6% in September.

Across the regions, the inflation rate hovered between 16.7% in the North East region to 36.4% in the Savannah region. Inflation on both local and imported items ticked higher in September to 23.4% and 17.0% from 22.2% and 16.1% respectively.

The September sitting of the Monetary Policy Committee (MPC) of the central bank saw the committee hand down its first rate cut since January 2024 with the MPC asserting that its latest forecast showed that inflation will continue to ease towards the range target of 13.0% to 17.0% for the year, barring any unanticipated shocks.

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