Inflation drops further to 45% in March

The general price levels (Inflation) in the country has dropped for the third consecutive month from 52.8 per cent in February to 45 per cent in March.

This is the biggest drop since the rate reached its peak at the close of 2022.

The country has been battling with high inflation in the past two years as the rate hit an all time high of 54.1 per cent in December last year.

Since the beginning 2023, the rate has witnessed a continuous decline, falling for the first time in 19 months to 53.6 per cent in January and further to 52.8 per cent in February and now down to 45 per cent in March.

The International Monetary Fund (IMF) and other international agencies have all predicted global inflation to slow down this year, but it is not yet clear whether the trajectory as began this year will be sustained.

The IMF is projecting inflation to slow down towards the end of the year, provided central banks stayed the course.

The Economist Intelligence Unit (EIU) is also predicting that inflation in Ghana would average about 20 per cent in 2023 albeit, the signals to achieve that are not yet clear.

The World Bank is, however, predicting that inflation in Ghana will stay above 50 per cent in 2023.

Major drivers of March inflation

Last month’s inflation was driven by the furnishings, household equipment division, which recorded an inflation rate of 67.4 per cent.

This was followed by housing, water, electricity, gas and other fuels (64.7 per cent); personal care, social protection and miscellaneous services (53.7 per cent); transport (52 per cent); food and non-alcoholic beverages (50.8 per cent).

The rest are alcoholic beverages, tobacco & narcotics (41.2 per cent); clothing and footwear (38.3 per cent); recreation and culture (32.8 per cent); health (27.9 per cent); information and communication (15.8 per cent); insurance and financial services (10.5 per cent); and education (7.9 per cent).

The restaurant and accommodation services division recorded the lowest inflation rate of 6.9 per cent.

Food inflation

Food inflation also dropped from 59.1 per cent in February to 50.8 per cent, while non-food inflation also fell from 47.9 per cent to 40.6 per cent.

Inflation for locally produced items also decreased from 41.9 per cent while that of imported items was 51.6 per cent.

The food inflation of 50.8 per cent was driven by fruit and vegetable juices (77.1 per cent).

This was followed by milk, other dairy products and eggs (73.2 per cent); tea, mate and other plant products for infusion (72.1 per cent); cereals and cereal products (68.8 per cent); sugar, confectionery and desserts (65.8 per cent); water (63.9 per cent); oils and fats (56.4 per cent); fish and other seafood (55.2 per cent); and ready-made food (55.1 per cent).

Others are live animals and meat (54.7 per cent); soft drinks (44.4 per cent); coffee and coffee substitutes (40 per cent); fruits and nuts (38.5 per cent); cocoa drinks (34.2 per cent); and vegetables, tubers and pulses (25.8 per cent).

Regional inflation

The Western North Region, with a rate of 67.3 per cent, emerged as the region with the highest inflation.

This was followed by Bono Region (51.3 per cent); Eastern Region (51.2 per cent); Greater Accra (49.3 per cent); Central Region (47.2 per cent) and Savannah Region (44.8 per cent). 

Oti and Upper East regions both recorded inflation rates of 44.7 per cent.

The rest are Upper West (43.2 per cent); North East (43 per cent); Bono East (42.4 per cent); Northern Region (41.7 per cent); Ahafo Region (38.7 per cent); and Ashanti Region (36.5 per cent).

The Volta Region recorded the lowest inflation rate of 25.6 per cent.