Price Pressures Pushes Inflation Up Again at the Start of the Last Quarter

The consumer price index nudged up at the start of the last quarter of the year to signal upward price pressures as the year draws to a close. According to data released by the Ghana Statistical Service, the inflation rate picked up for the second consecutive time in October as several factors account for the resurgence of upward pressures on consumer prices. These include hikes in the prices of petroleum products and the Cedi’s recent struggles against its major trading international partner currencies. Also culminating in the price build-up on consumer goods is increased government spending with the December elections in focus.

October’s inflation rate was subsequently reported at 22.1%, its highest since June 2024, having risen from 21.5% in the previous month. This notwithstanding, the month-on-month inflation reading for October took a nosedive to 0.9%, down from 2.8% in September. Decreases in the prices of some items with significant weights such as imported rice, bread, tomatoes, and among others supported the decline in the month-on-month reading.

Food inflation similarly edged up for the second consecutive time in October after tanking at a 2024-year low in August at 19.1%. Year-on-year food inflation rose from 21.1% in September to print at 22.8% in October. Month-on-month food inflation, however, registered a major disinflation from 4.2% in the previous month to 0.3% in October as some items such as vegetables & tubers, and cereals recorded a deflation of -6.3% and -1.8%.

Inflation for the non-food inflation basket saw an increase from 20.9% in September to 21.5% with four out of the observed 12 items recording numbers higher than the wider group’s average rate. Alcoholic beverages and Housing & utilities came in as the biggest price drivers with inflation figures of 31.7% and 27.6% respectively. Month-on-month inflation rate for the non-food category similarly underwent a decline, lowering from 1.6% in the previous month to 1.4% in October.

Across the regions, the inflation rate ranged from 18.3% in the Eastern region to 42.0% in the Upper East region. Despite the currency pressures, inflation on imported items slowed to 16.3% in October from 17.0% in September whilst that on locally produced items saw an increase from 23.4% in September to 24.6% in October.

The last sitting of the Monetary Policy Committee of the central bank for the year due later in the month is expected to see the committee act cautiously following the rise in the consumer price index. The policy rate is thus expected to be stalled in the interim whilst the committee re-evaluates the new data for signs of the prevalence of underlying risks to the inflation outlook.