Ghana’s Inflation at Four-Month High Reduces Rate-Cut Prospects
TLDR
- Ghana's annual inflation rate increases to 22.1% in October, highest in four months.
- Inflation accelerated in food and non-food sectors, driven by key factors like food, housing, water, fuel, and transport.
- This rise hampers the expected interest-rate cut in November, reflecting persistent inflationary pressures in the country.
Ghana's annual inflation rate rose to 22.1% in October, up from 21.5% in September, marking a four-month high. The increase dampens the likelihood of an anticipated interest-rate cut later in November.
Government Statistician Samuel Kobina Annim, speaking in Accra, highlighted that inflation in both food and non-food sectors had accelerated, with key contributors including food, housing, water, fuel, and transport, which together accounted for about two-thirds of October’s inflation.
This marks the second consecutive monthly increase in consumer inflation for Ghana, a country rich in cocoa, gold, and oil, which is working to recover from a severe economic crisis. October's inflation rate is the highest since June, underscoring persistent inflationary pressures.
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Key Takeaways
Ghana's inflation spike comes amid economic recovery efforts, including a nearing conclusion of its debt restructuring, with $13 billion in international bonds recently restructured. In addition, Ghana reached a third-review agreement with the International Monetary Fund on its $3 billion loan program. The inflation uptick, driven by rising prices in essential sectors, may prompt the central bank to maintain or raise interest rates in November to counter further price pressures. The government’s fiscal reforms and IMF support underscore efforts to stabilize Ghana’s economy amid challenging conditions. However, rising inflation may hinder recovery momentum, potentially affecting consumption and investment.
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