Ghana’s inflation rate drops to a 12-month low reaching 38.1% for September.
Annual inflation decreased to 38.1% from August’s 40.1%, according to Government Statistician Samuel Kobina Annim in Accra.
Causes of the decline
The primary factor behind this decline was food prices, with food inflation dropping to 49.4% from August’s 51.9%, while non-food prices grew by 29.3%, compared to 30.9% in August. Prices saw a 1.9% month-on-month increase.
Professor Samuel Kobina Annim, the Government Statistician, credited the decrease to the stringent monetary policy actions taken by the Bank of Ghana.
The Bank of Ghana relies on an Inflation Targeting (IT) framework, where the Monetary Policy Rate (MPR) serves as the primary tool to shape monetary policy and stabilize inflation expectations in the economy.
Despite the decline, the September 2023 inflation rate remains significantly higher than the government’s revised year-end estimate of 31.3%, in contrast to the initial projection of 18.9% presented in the November 2022 budget.
Backstory
Last week, thousands of opposition members in Ghana marched through the streets of Accra.
They were demanding the dismissal of central bank Governor Ernest Addison, along with his two deputies, Maxwell Opoku-Afari and Elsie Addo Awadzi, accusing them of failing to control the rising prices and allegedly squandering almost $5bn.
Ghana has been battling high inflation and an unsustainable debt burden. However, the nation has successfully obtained a $3 billion loan from the IMF, spanning three years.
This loan agreement comes with several concessions, such as debt restructuring to reduce interest payments and extend the debt’s duration.
