Finance Minister gives reasons for the stall in inflation deceleration
Minister for Finance, Dr Mohammed Amin Adam, has assigned reasons for the seeming stall in the deceleration of Ghana’s headline inflation.
Speaking on the occasion of the FirstBank Ghana Business Dinner to launch the bank’s new name, the Finance Minister attributed the stall in the deceleration of inflation to pass-through effects of the cedi depreciation on prices of imported goods and non-food inflation.
“Over the first months of 2024, the deceleration of inflation has stalled due to pass-through of the depreciation on prices of imported goods, on non-food inflation while food inflation marginally fell. This however is being managed,” he posited.
Year-on-year inflation fell from 53.4 percent in January 2023 to 23.2 percent in December 2023, reflecting more stable exchange rates and the effects of monetary policy tightening in 2022-23.
Headline inflation for March 2024, however, surged to 25.8% up from 23.2% in the preceding month making the country’s headline inflation the sixth (6th) highest on the African Continent.
Non-food inflation went up by 22.6% while food inflation increased to 29.6%. Locally produced items and imported items went up by 26.6% and 23.8% respectively.
Specifically, 12 out of the 13 divisions recorded higher rates of inflation year-on-year, dominated by transport (+4.4% year-on-year), education services (+4%), health (+3.9%), sport and recreation (+3.9%), among others.
Speaking further, the Finance Minister noted that fiscal consolidation is broadly on track with an estimated deficit of 4.6 percent of GDP at the end of 2023, significantly lower than the 10.7 percent deficit in 2022.
The fiscal deficit is projected to decline further to 5 percent of GDP in 2024 due to the ongoing fiscal consolidation reforms and external debt restructuring.
