Inflation in Ghana fell marginally to 53.6% in January 2023 from 54.1% recorded in December 2022, according to data from the Ghana Statistical Service.
Despite this small decrease, inflation remains at a very high level, and rising food prices are considered to be the main driver of this trend.
On the other hand, transport inflation fell for the first time in 19 months due to a reduction in fuel prices during the period. Additionally, non-food items prices have also declined in the period under review.
The high inflation rate has a number of implications for the economy, including keeping lending rates at an elevated level, with an average of around 35%.
This means that the cost of borrowing is expected to remain high, which could be a challenge for businesses and individuals seeking to access credit.
It is worth noting that inflation rates vary by region, with the Eastern and Greater Accra regions having the highest inflation rates at 66.2% and 65% respectively. The Volta region has the lowest inflation rate at 34.7%.
The central bank are currently considering measures to address the high inflation rate, which has been a persistent issue for some time now. These measures could include a range of policy tools, such as monetary policy adjustments or fiscal policy changes aimed at reducing inflationary pressures in the economy.
In addition to high inflation rates, Ghana has also faced a number of other economic challenges in recent years, including high levels of debt and a growing trade deficit. These issues have been exacerbated by the COVID-19 pandemic, which has had a significant impact on the global economy.
Despite these challenges, Ghana remains a key player in the region, with a growing and diversifying economy that has attracted significant investment in recent years.
Overall, while high inflation remains a significant challenge for the Ghanaian economy, there are also reasons for optimism about the country’s future prospects.
The central bank will be closely monitoring economic indicators particularly inflation in the coming months.