Ghana’s inflation rate surged more than expected in December, driven by steep increases in food, transport and housing costs in the West African country.
(Bloomberg) — Ghana’s inflation rate surged more than expected in December, driven by steep increases in food, transport and housing costs in the West African country.
Annual inflation quickened to 54.1% in the world’s second-largest cocoa producer, from 50.3% a month prior, Government Statistician Samuel Kobina Annim told reporters Wednesday in the capital, Accra. That’s the seventh-highest inflation rate in the world among 120 nations, including the eurozone, tracked by Bloomberg.
The inflation rate has now surpassed the 10% ceiling of the central bank’s target range since September 2021. The median estimate of four economists polled by Bloomberg was for price growth to quicken to 51.8%. Imported inflation was 61.9%, food prices rose 59.7% and transport costs increased 71.4%.
The cedi lost as much as 6.1% against the dollar before the release of the data.
The inflation surge may not translate into a further interest rate hike by the Bank of Ghana’s monetary policy committee, which meets later this month. Price growth is set to slow in January on falling fuel prices and a strengthening cedi after Ghana signed a staff-level agreement with the International Monetary Fund on Dec. 12 for a $3 billion bailout.
The deal is a key step in the country’s plans to restructure its debt, which was forecast to exceed the size of its economy last year. The news caused the cedi to appreciate 41% against the dollar last month, trimming its losses for the year to 39% and softening inflation.
The central bank has cumulatively raised the key rate by 13.5 percentage points since November 2021 to a 19-year high of 27% to steady the cedi, which has lost about 64.4% of its value in the last 12 months, according to Bloomberg data.
“I think the peak of inflation is near, the policy rate will be held given the outlook for a slowing inflation rate,” Courage Boti, an economist at Accra-based GCB Capital Ltd., said by phone. “Economic growth is already depressed and fourth quarter GDP promises to be even lower — as a result the central bank may become more inclined to supporting growth and being more accommodative as inflation is seen moving in the right direction.”
The central bank forecasts inflation to peak in the first quarter of 2023 and settle around 25% by the end of the year. Non-food inflation accelerated to 49.9% from 46.5%.
–With assistance from Simbarashe Gumbo, Rene Vollgraaff and Moses Mozart Dzawu.
(Updated with details throughout)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.