Ghana experienced a continued decline in consumer inflation for the 13th month in a row in January
Ghana’s consumer inflation (GHCPIY=ECI) has decreased for the 13th consecutive month, reaching 3.8% year-on-year in January, down from 5.4% in December. This trend indicates price stability in the cocoa-producing West African nation, according to its statistics service on Wednesday.
The decrease of 1.6 percentage points was attributed to the reduction in food inflation, which decreased to 3.9%, as stated by Government Statistician Alhassan Iddrisu during a news conference.
Iddrisu stated that this is the lowest inflation rate recorded since the rebasing of Ghana’s Consumer Price Index in 2021. He further noted, “The sustained decline signals that Ghana is firmly on a path towards price stability.”
The decline signifies an ongoing trend of sharp decrease, reflecting a drop in inflation from the unprecedented rate of 54.1% recorded in December 2022.
The continued decrease in inflation offers the Bank of Ghana greater flexibility to further ease monetary policy, following a series of rate cuts that have lowered its main lending rate by a total of 12.5 percentage points since last July. “An exceptionally low inflation figure that keeps the possibility of further easing in Ghana wide open,” remarked Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Bank.
Inflation has fallen below the Bank of Ghana’s 8% target, which includes a 2% tolerance range. However, after the most recent monetary policy committee meeting in January, Governor Johnson Asiama stated that it is premature for the central bank to reevaluate the target.
Ghana is recovering from its most significant economic crisis in decades and is anticipated to finish a three-year IMF support programme in August.
