Ghana: Inflation rate posts monthly jump of 9.9%; now 50.3%

Ghana’s annual inflation rate quickened for the 18th straight month to 50.3% in November of 2022, up from 40.4% in the prior month, marking a month-on-month increase of 9.9%.

The country’s inflation rate is the  highest reading since May 2001 – although less than the 63.1% inflation rate recorded in March 2021.

The new headline inflation is above the central bank’s medium target band of 6% to 10%.

The hike in inflation is reported to be on the back of the incessant depreciation of the local currency against its anchor currency – the dollar.

According to government statistician, Professor Samuel Kobina Annim, continued depreciation of the cedi during the month raised the cost of imported goods (55.1% as against 43.7% in October) like gasoline, driving up transport costs (63.1% as against 46.3% in October)

The cedi, in the first week of the month of November, had recorded close to 60% year-to-date depreciation against the dollar.

The cedi has however, within this week, strengthened against the dollar reaching GHS 10.40 to a dollar on Wednesday morning according to official exchange rates published by the Central Bank.

The strengthening of the cedi was on the back of a Staff-Level Agreement (SLA) reached with the IMF on Tuesday, December 13, 2022.

Despite the strengthening of the cedi against the dollar, the cedi is expected to depreciate against the dollar ahead of the Christmas festivities given the anticipated high demand for the dollar.

The anticipated high demand for the dollar, resulting in a depreciation of the cedi will in turn result in high prices of goods, thereby further increasing the country’s headline inflation.

Source: norvanreports