Ghana’s inflation rate fell for a second consecutive month in February as almost two months of relative stability in the currency and a slump in global oil prices helped contain food costs.
(Bloomberg) — Ghana’s inflation rate fell for a second consecutive month in February as almost two months of relative stability in the currency and a slump in global oil prices helped contain food costs.
Annual inflation decelerated to 52.8% from 53.6% in January, Government Statistician Samuel Kobina Annim told reporters Wednesday in the capital, Accra. The median estimate of eight economists in a Bloomberg survey was 52.9%.
“The slowdown in food caused the rate to fall,” Annim said after food-price growth eased for the first time in more than a year to 59.1% from 61% in January, with non-food inflation unchanged. Prices rose 1.9% in the month.
Cheaper crude, a program to buy refined fuel using gold revenue and a decision by the government to unilaterally stop payments on eurobonds and other external debt in December — pending an agreement with creditors that’s needed to unlock an International Monetary Fund bailout — has reduced demand for dollars and helped steady the cedi.
Ghana’s currency, which whipsawed last year over concern about its ballooning debt load and then optimism about IMF support, has eased 0.2% against the dollar since the start of February, after weakening 17% in January. It traded at 12.2761 by 10:52 a.m. in Accra.
The stabilization of the currency and softening inflation may lead the central bank’s monetary policy committee to pause its steepest-ever phase of tightening when it announces its latest rate decision on March 27, Priscilla Twumasi Baffour, an economist and senior lecturer at the University of Ghana, said ahead of the release.
“I think the country has turned the corner with the rise of inflation,” she said.
The Bank of Ghana’s MPC has more than doubled the key interest rate to 28% since November 2021 in a bid to regain investor confidence and conquer inflation that’s exceeded the 10% ceiling of its target range for 18 months.
–With assistance from Rene Vollgraaff.
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