Ghana’s Inflation Falls to 29-Month Low, Boosting Rate Cut Prospects
TLDR
- Ghana's annual inflation rate decreased to a 29-month low in August, hinting at a potential interest rate cut by policymakers on September 30.
- Consumer prices rose by 20.4%, down from 20.9% in July, with deflation in key categories like milk, oils, fats, and fruits and nuts driving the decrease.
- Analysts anticipate a 100 basis-point cut by the Bank of Ghana, considering longer-term inflation expectations over immediate targets.
Ghana’s annual inflation rate dropped to a 29-month low in August, raising the likelihood of an interest rate cut when policymakers announce their decision on September 30.
Consumer prices rose 20.4%, down from 20.9% in July, according to Government Statistician Samuel Kobina Annim.
The fall was driven by deflation in key categories like milk, oils, fats, and fruits and nuts. Food price growth eased to 19.1%, down from 21.5% in July, while non-food inflation increased slightly to 21.5%. Prices fell 0.7% month-on-month.
Key Takeaways
The inflation slowdown and the stability of the Ghanaian cedi may prompt the Bank of Ghana to cut interest rates after maintaining the key rate at 29% since January. Analysts predict a 100 basis-point cut, focusing on longer-term inflation expectations rather than immediate targets. This comes as the cocoa-, gold- and oil-producing West African country battles to emerge from an economic crisis.
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