Ghana’s inflation declines to 20.4% in August 2024

GHANA’S inflation rate has seen a slight decline, easing to 20.4% in August 2024 from 20.9% recorded in July, according to the latest report from the Ghana Statistical Service (GSS). The marginal slowdown was mainly driven by a reduction in food inflation, which fell from 21.5% in July to 19.1% in August.

This marks a continued trend of food prices easing, reflecting some relief for consumers, though the overall inflationary pressure remains significant.

Non-food inflation, on the other hand, saw an uptick, rising from 20.5% in July to 21.5% in August. Notably, inflation on imported goods also increased slightly, from 15.6% in July to 16.1% in August, indicating that external factors continue to influence price hikes, particularly in housing, water, electricity, gas, and fuel, which recorded an inflation rate of 31.8%.

Tracing the inflation trends over the past year provides important context. In 2023, Ghana faced persistent inflationary challenges, with inflation peaking at 54.1% in December 2022. Throughout 2023, inflation trended downwards, but the declines were gradual and hard-won. By January 2023, inflation stood at 53.6%, and by June 2023, it had slowed further to 42.5%. However, the rate of inflation was still far above the single-digit target, driven by soaring food and non-food prices due to both global and domestic factors.

In 2024, the government intensified efforts to stabilize inflation, leveraging fiscal policies and tightening monetary measures. The sharpest decline in inflation occurred from the second quarter of 2024, supported by improved food supply chains and better harvests, contributing to the easing of food inflation.

However, persistent price pressures in non-food items and imported goods continued to keep inflation elevated, despite the improving food situation. The non-food inflation rate in August 2024 was 21.5%, with categories such as alcoholic beverages, tobacco, and narcotics recording 25%, while housing, water, electricity, and gas showed the highest inflation among non-food items, at 31.8%.

The regional inflation picture revealed that the Upper East Region recorded the highest rate in August, at 27.8%, while the North East Region posted the lowest inflation rate, at 10.1%.

Prof. Samuel Kobina Annim, Government Statistician, noted that while the overall inflation rate showed signs of easing, significant challenges remain. Inflation in key sectors like education, health, and accommodation services still outpaces the national average, with rates as high as 29.5% for restaurants and accommodation services, 22% for education, and 20.6% for health services.

This gradual decline in inflation is crucial for policymakers as they aim to bring inflation closer to the central bank’s target rate of around 8% in the medium term, while balancing economic growth with measures to control price hikes. The report also indicates that the inflation outlook for the remaining months of 2024 remains uncertain, depending on both global economic conditions and domestic policy interventions. As Ghana navigates this complex inflationary landscape, businesses and households continue to adjust to the prevailing economic environment.