Ghana’s inflation rate surged to 43.1% in July, marking the highest level in four months. The increase was primarily driven by escalating food prices, exerting further pressure on the central bank to consider continued interest rate hikes in the near future.
Samuel Kobina Annim, the Government Statistician, revealed that the annual inflation rate climbed from 42.5% in June to 43.1% in July. This exceeded the median estimate of 42% projected by five economists in a Bloomberg survey.
The rise in inflation was mainly attributed to the significant uptick in food prices. Food inflation escalated from 54.2% in the previous month to 55%, while non-food prices also experienced an increase, moving from 33.4% to 33.8%. Overall, prices saw a 3.6% rise during the month.
Ghana’s monetary policy committee recently raised the country’s benchmark interest rate by 50 basis points to 30%, citing the persistence of price pressures. This brings the cumulative rate increase to 16.5% points since November 2021. If the inflation trend continues, policymakers may consider another interest rate hike during their scheduled meeting in September.
Opinion: Ghana’s challenge with rising inflation underscores the delicate balancing act faced by central banks in managing economic stability amidst price pressures. The country’s proactive approach in adjusting interest rates highlights the commitment to curbing inflation and maintaining a resilient economy.