Ghana’s inflation rate unexpectedly fell for the first time in 20 months in January after the cedi strengthened.
(Bloomberg) — Ghana’s inflation rate unexpectedly fell for the first time in 20 months in January after the cedi strengthened.
Annual inflation slowed to 53.6% from 54.1% in December, Government Statistician Samuel Kobina Annim told reporters Wednesday in the capital, Accra. The median estimate of seven economists in a Bloomberg survey was 54.3%.
Non-food inflation slowed to 47.9% from 49.9% in December and food-price growth quickened to 61% from 59.7%.
The marginal drop in consumer prices was “more from the non-food inflation,” Annim said. “This partly suggests that that stability we saw in the exchange rate might have had some impact on the January” inflation rate.
The West Africa’s second-largest economy secured a preliminary deal with the International Monetary Fund for a $3 billion bailout in December, prompting a brief rally in the cedi.
Ghana approached the IMF in July for an economic support package after investor concerns about ballooning government debt led to a selloff of government bonds, effectively locking the country out of global capital markets.
The easing of inflation last month is good news, even though it’s remained way above 10%, the top of the central bank’s target range, for 17 months.
Currency volatility and price pressures may persuade the monetary policy committee to again jack up interest rates on March 27 after a 100-basis point hike at its last meeting. The cedi has depreciated almost 17% against the dollar this year, as Ghana reorganizes its domestic debt to get final approval for its IMF program.
–With assistance from Simbarashe Gumbo.
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