Ghana’s inflation rate increased to 43.1% in July, reaching the highest level in four months due to rising food costs which puts more pressure on the central bank to continue raising interest rates in the coming month. 


    The Government Statistician, Samuel Kobina Annim revealed that the annual inflation rate rose from 42.5% in June to 43.1%.


    This marked the highest level since March, slightly surpassing the median estimate of 42% provided by five economists in a Bloomberg survey. 



    Key Inflation Drivers

    Annim noted that the surge in inflation was primarily driven by higher food prices.  


    Food inflation accelerated from 54.2% in the previous month to 55%, while non-food prices also saw an increase, growing from 33.4% to 33.8%. Overall, prices increased by 3.6% during the month. 


    Recall that Ghana’s monetary policy committee recently increased the country’s benchmark interest rate by 50 basis points to 30% citing that price pressures were not easing fast enough.


    This has seen the cumulative rate increase to 16.5% points since November 2021. 


    Experts believe that if this upward trend in inflation continues, policymakers might be inclined to implement another interest rate hike during their meeting scheduled for September 18-22. 


    The Ghanaian cedi traded relatively unchanged at 11.1646 per dollar at 11:04 a.m. in Accra. The nation’s dollar bond maturing in 2032 rose 0.2 cents to 45.1 cents on the dollar, according to Bloomberg generic pricing. 


    What you should know

    The International Monetary Fund (IMF) approved a $3 billion, three-year extended credit facility for Ghana. 


    The loan is aimed at supporting Ghana’s economic recovery and stability amid the COVID-19 pandemic and the geopolitical tensions in the region.  


    The IMF said the program will help Ghana address its fiscal and debt vulnerabilities, boost growth and job creation, and strengthen social protection and governance.


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