Inflation hits 21 year high at 33.9% in August over weak cedi
Ghana’s headline inflation rate continues its upward trend as it recorded an annual rate of 33.9% in August, a 21 year record high.
This is the 15th straight month the country’s headline inflation has risen, it is also the 12th straight month the inflation rate has surpassed the upper limit of the Central Bank’s target band of 10%.
Speaking to journalists on Wednesday, Government Statistician, Professor Samuel Kobina Annim attributed the rise in inflation rate to imported inflation.
Annual imported inflation rose to 35.2% in August from 33.9% in July 2022, outpacing domestic price growth for a fifth month.
The rise in imported inflation, Professor Samuel Annim, further attributed to the depreciation of the local currency (cedi).
The cedi has weakened more than 39% against the dollar this year and is the second-worst-performing currency in the world, after the Sri Lankan rupee.
The depreciation prompted the central bank to hold an emergency meeting in August, when it raised the key interest rate by 300 basis points to 22%, the biggest margin since at least 2002, bringing cumulative increases since November to 850 basis points.
The inflation data is unlikely to persuade the central bank to increase interest rates again when it announces its decision on September 26, unless a stabilisation in the currency since the August hike is reversed.
Key to its stabilisation will be news on talks with the IMF that may materialise at the Fund’s annual meeting in October this year.
Meanwhile, food-price inflation quickened to 34.4% from 32.3% in July, and non-food inflation accelerated to 33.6% from 31.3%.
