Inflation ends 2023 downwards

The country's consumer inflation inched down for the fifth straight month to 23.2 per cent in December last year from 26.4 per cent recorded in November, raising expectations of a monetary policy easing by the central bank later this month.

The Consumer Price Index (CPI) which measures inflation recorded 200.6 points for December 2023 as compared to 162.8 points for December 2022, giving the year-on-year rate of inflation for December 2023 as 23.2 per cent, the Ghana Statistical Service (GSS) said.

This means that in the month of December 2023, the general price level was 23.2 per cent higher than December 2022 and on month-on-month inflation between November 2023 and December 2023 was 1.2 per cent.

This is the lowest inflation recorded since December 2022 but still well above the central bank's target band of six to 10 per cent.

Food inflation eases

Food inflation drove down the overall inflation with a rate of 28.7 per cent in December last year, compared with 32.2 per cent in November 2023, according to the Government Statistician, Professor Samuel Kobina Annim.

Presenting the CPI results at a press conference in Accra yesterday, Prof. Annim said non-food inflation also went down to 18.7 per cent in December last year from 21.7 per cent the previous month.

For food inflation, nine out of 15 sub-classes registered inflation above the overall food inflation of 28.7 per cent.

They included cocoa drinks (73.1 per cent); tea and related products (67.8 per cent); vegetables, tubers, plantain, cooking banana and pulses (33.8 per cent) and coffee and coffee substitutes (32.8 per cent).

Inflation for locally produced items stood at 23.8 per cent in December 2023, while inflation for imported items was 21.9 per cent.

Six divisions recorded inflation rates higher than the national average.

Alcoholic beverages, tobacco and narcotics recorded the highest rate of inflation of 38.2 per cent, with personal care, social protection and miscellaneous goods and services following at 31.1 per cent.

Food and non-alcoholic beverages was next at 28.7 per cent; restaurants and accommodation services was at 28.0 per cent; furnishings, household equipment and routine household maintenance (26.9 per cent) and recreation, sports and culture (24.9 per cent).

For the regions, Eastern Region recorded the highest rate of inflation of 35.9 per cent followed by the Western with 34.3 per cent, and Western North with 33.7 per cent inflation.

Nine regions recorded rates higher than the national average of 23.2 per cent.

They are the Eastern (35.9 per cent), Western (34.3 per cent), Western North (33.7 per cent), Northern (31.9 per cent), Volta (31.8 per cent), Upper East (30.0 per cent), North East (28.0 per cent), Bono (27.4 per cent), and Upper West (25.7 per cent).

Monetary policy decision

The central bank’s Monetary Policy Committee will announce results of its next meeting on Monday, January 29, this year.

The Bank of Ghana (BoG) had since 2021 tightened its key benchmark interest rate policy due to soaring inflation, which peaked at more than 54.1 per cent in December 2022.

In November last year, it maintained its main interest rate at steady at 30 per cent for the second meeting in a row to try to keep inflation falling.

Targets

By this, the government ended the year with an inflation rate below its revised target of 31.3 per cent as captured in the 2024 National Budget presented to Parliament in November last year.

The country is currently negotiating a debt restructuring with its bilateral and commercial creditors to try to emerge from its economic crisis.

CPI methodology

Prices are collected from about 8,337 outlets in 57 markets.

The prices are collected for approximately 47,800 products every month from 16 regions.

The products are ordered in a hierarchy of 13 divisions, 44 groups, 98 classes, 156 subclasses and 307 items.

The GSS explains that while every item can only be part of one subclass, every subclass can only be part of one class.