Ghana’s Inflation Rate Sees Massive Drop Ahead Of Year’s End

Ghana’s Inflation Rate Sees Massive Drop Ahead Of Year’s End

  • The growth of prices slowed from 35.2% in October to 26.4% in November 2023, according to the government statistician
  • November is the fourth consecutive month in which inflation has dropped in the wake of Ghana's economic crisis
  • The Centre for Environmental Management and Sustainable Energy highlighted the role of stable fuel prices in these figures to

For the fourth consecutive month, Ghana has experienced a declining inflation rate.

Inflation reached 26.4% in November, an 8.8-percentage-point decrease from the 35.2% recorded in October 2023.

Ghana’s Inflation Rate Sees Massive Drop
Finance minister Ken Ofori-Atta (L). Source: Getty Images.
Source: Getty Images

This month-on-month reduction of 8.8% represents the most significant drop recorded in Ghana over the past 13 months. It has been attributed to a decrease in food inflation.

Inflation has seen a steady drop in the last few months. Notably, fish, other seafood, water, and soft drinks experienced deflation during this period.

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The recently released Consumer Price Index (CPI) data on Thursday, December 14, 2023, revealed that year-on-year food inflation stood at 32.2%, while non-food inflation was 21.7%.

The Western Region recorded the highest inflation rate at 39.8%, while Greater Accra registered the lowest at 19.8%.

Fuel prices have driven inflation in the past and reached as high as GH¢20 in 2022 but have dropped to about GH¢12 throughout 2023.

Cause for celebration

The director of the Centre for Environmental Management and Sustainable Energy, Benjamin Nsiah, told that the stability of fuel prices has been key to the improved inflation outlook.

"Fuel plays a critical role, so if fuel prices on the international market begin to decline, historically, inflation will also decline.”

Nsiah also said he expected this stability and improved inflation rate to continue in the near future.

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"In the short term, we can celebrate and jubilate. If you look at the international market, we do not see any price surges on the international market.”

High food inflation in Ghana

At some point in 2022, the World Bank ranked Ghana as the country with the highest food prices in Africa.

The World Bank, in its October 2022 Africa Pulse report, said Ghana's high food prices were due to the Russian-Ukrainian war.

The war was noted to have led to hikes in food prices for countries that rely on grain from Russia and Ukraine.

Drivers of food inflation

Earlier in 2023, the figure for food inflation increased when viewed monthly.

The main drivers are Oilband Fats at 67%, seafood at 42.9%, and water at 42%.

The GSS data also added that all of the above items recorded inflation rates higher than the national average of 33.9%.

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