Inflation to taper back to BoG medium-term target in 2025
Economist at the World Bank, Kwabena Gyan Kwakye, has projected inflation rate to taper back to the Central Bank’s medium-term target of 8+/-2 by 2025.
“The World Bank’s projection is that inflation will reverse back to the Bank of Ghana’s medium term target by 2025,” stated Mr Kwakye.
He made the assertion during the launch of the World Bank’s new report on Ghana titled “Price Surge: Unraveling Inflation’s Toll on Poverty and Food Security.”
Ghana’s headline inflation currently stands at 42.5% (June 2023), a 0.3% increase from the previous month’s headline inflation figure of 42.2%.
The marginal increment in inflation followed four months of continued reduction in headline inflation from January to April 2023 before the uptick in May and then June.
The country’s inflation was driven primarily by increments in food prices as food inflation outpaced non-food inflation.
Food inflation for June 2023 exceeded the national average (42.5%) standing at 54.2%, last month’s food inflation was 51.8%.
Non-food inflation was 33.4% with last month’s non-food inflation being 34.6%.
According to economic analysts, food price pressures pose as a near-term upside risk to inflation which could moderate the pace of disinflation.
Analysts assert that the country’s disinflation process could resume in July, although the country’s food basket remains a significant source of price pressure.
Per the new World Bank report, nearly 850,000 Ghanaians were pushed into poverty in 2022 as a result of high inflation.
According to the report, high inflation had catastrophic effects on poverty and food security, significantly impacting the poor.
Inflation also worsened food insecurity in the country with a quarter of the population deemed to be food insecure at end-2022.
According to the Ghana Statistical Service, 23% and 44% of Ghanaians are consumption and multi-dimensionally poor.
