Ghana's Inflation Declines, Easing Rate Hike Pressure.
1 min Read September 14, 2023 at 10:51 AM UTC
- Ghana’s inflation rate declined unexpectedly in August to a 10-month low, easing pressure on the central bank to keep raising borrowing costs.
- Annual inflation moderated to 40.1% from 43.1% in July, the slowest rate of change since October, per Government Statistician Samuel Kobina Annim.
- The apex bank has so far focused on keeping inflation under control. In July, it raised the key lending rate to 30% to combat surging inflation which stood at 42.5% at the time.
Along with inflationary pressures, Ghana is currently grappling with a disturbing financial crisis stemming from a public debt that is nearly as large as its GDP. In May, the government secured a $3 billion bailout from the IMF, of which $600 million has been disbursed, helping to calm tensions in the debt and equity capital markets. The World Bank expects economic growth to slow down to 1.5% this year and remain depressed in 2024 at 2.8% but stage a recovery by 2025. In the long run, Ghana needs to implement structural reforms including collecting more domestic revenue, implementing tighter expenditure controls, and addressing the energy sector shortfalls.
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