Ghana’s inflation rate dropped more than projected to 35.2% a 14-month low in October from the 38.1% recorded in September 2023.
The cocoa-producing country, which faces its worst economic crisis in a generation, is in talks with bilateral and commercial creditors to restructure its debts.
Government Statistician Samuel Kobina Annim announced that annual inflation dropped to 35.2% from 38.1% in September in Accra on Tuesday.
The decision to release the data by one day was to accommodate Finance Minister Ken Ofori-Atta’s announcement of the 2024 budget tomorrow
This decision provides additional leeway for the central bank to maintain unchanged borrowing costs during its upcoming monetary policy committee meeting later this month.
Food inflation
The faster-than-expected deceleration was propelled by a reduction in food prices, exceeding the median estimate of seven economists in a Bloomberg survey, which projected a rate of 36.3%.
Food inflation moderated to 44.8% from September’s 49.4%, while non-food price growth was 27.7%, down from 29.3% in the prior month. Overall prices increased by 0.6% in the month.
More insight
The inflation slowdown, coupled with additional funding expected from an International Monetary Fund (IMF) bailout package later this year, aimed at bolstering reserves and supporting the cedi, might influence the monetary policy committee to keep borrowing costs at 30% for a second consecutive meeting. The committee is set to announce its decision on Nov. 27.
The budget presented by Ofori-Atta is anticipated to outline the government’s efforts to fulfill the conditions of the $3 billion IMF program approved in May, including progress on an in-principle deal with bilateral lenders to restructure the nation’s debt and unlock additional funds.
