Ghana’s inflation decelerates, raising hopes for a rate cut

In December 2023, Ghana’s inflation dropped to 23.2%, a significant decline from the 26.4% reported in November 2023.

The annual rate of food inflation eased to 28.7% and the non-food inflation rate slowed to 18.7%.

Locally produced items experienced 23.8% inflation, and imported items had a rate of 21.9%.

Regionally, the Eastern region had the highest food inflation at 51.3%, while the Upper East had the lowest at 18.8%. Greater Accra ranked 14th among the 16 regions, with a food inflation rate of 22.2%.

To combat inflation, the Bank of Ghana’s monetary policy committee held the policy rate at 30% in November for the third time in a year.

Then, the bank stated, “There is a need to keep the policy rate tighter for longer until inflation is firmly anchored on a downward trajectory towards the medium-term target.”

“The committee noted that though inflation is decelerating, it remains high relative to target. Therefore there is a need to keep the policy rate tighter for longer until inflation is firmly anchored on a downward trajectory towards the medium-term target. Given these considerations, the committee decided to maintain the monetary policy rate at 30.0 percent.” it added then.

The consistent decline in inflation figures has raised hopes that Ghana’s central bank may contemplate easing its monetary policy.

The central bank’s monetary policy committee will announce the results of its next meeting on Jan. 29.

Source: BI