Ghana’s headline inflation drops to 40.1% in August 2023

Ghana’s headline inflation rate declined to 40.1% in August, reaching a 10-month low to ease pressure on the central bank to keep raising borrowing costs.

According to reports from Bloomberg, this was the slowest rate of change since October.

The Government Statistician, Samuel Kobina Annim revealed that the annual inflation rate declined 43.1% in July to 40.1% in the latest data from the West African nation.

Key Inflation Drivers

Kobina Annim revealed that the main driver of the slowdown in inflation was a decline in food prices.

Food inflation slowed to 51.9% from 55% in July, and non-food price growth was 30.9% compared with 33.8%. Prices declined 0.2% month-on-month.

Bloomberg Africa Economist Yvonne Mhango revealed that:

“The sharper-than-expected slowdown in headline inflation was broad-based. A more stable cedi helped moderate inflation.”

What You Should Know

Since receiving an emergency bailout from the International Monetary Fund in May, the Ghanaian cedi has maintained relative stability. Following the data release, the cedi remained steady at a rate of 11.45 per dollar. Additionally, Ghana’s 2032-dollar bonds experienced a five-basis point decrease, bringing the yield down to 23.11%.

In July, the central bank increased rates by 50 basis points to 30% due to persistent inflation concerns, marking a total hike of 16.5 percentage points since November 2021. The monetary policy committee is set to announce a fresh rate decision on September 25th.

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