Our nation’s inflation trajectory continues its upward path, marking the third consecutive month of rising prices. In July, the inflation rate surged to 43.1%, compared to the previous month’s 42.5% in June.
Following a temporary dip in the initial four months of this year, inflation, gauged by the consumer price index (CPI), regained momentum in May, ascending from 41.2% in April to 42.2% in May. Subsequently, it climbed to 42.5% in June and now stands at the current level in July. This consistent uptick prompts a reevaluation of the efficacy of the monetary policy measures implemented to manage inflation.
This continuous rise in inflation heightens concerns about our country’s economic landscape, particularly considering that the surge in inflation was a key factor that led our government to seek assistance from the International Monetary Fund (IMF).
Ghana’s economy has grappled with significant challenges over the past twenty-four months, culminating in an alarming 22-year high inflation rate of 54.1% recorded in December 2022.
In response to this inflationary pressure, the Bank of Ghana has maintained a firm monetary policy stance, consistently raising the monetary policy rate to 30%. This policy action has translated into higher borrowing costs for individuals and businesses, as the policy rate significantly influences overall interest rates within our borders.
Key Drivers of July’s Inflation
The inflation observed in July was predominantly influenced by several factors. The personal care, social protection, and miscellaneous services sector reported the highest inflation rate at 60.5%. Following closely, the furnishings and household equipment division stood at 56.9%, while the food and non-alcoholic beverages category exhibited inflation of 55%. Other contributors to inflation included alcoholic beverages, tobacco, and narcotics (48.7%), housing, water, electricity, gas, and other fuels (47.4%), and health (41.2%).
Other sectors that made noteworthy contributions to inflation were clothing and footwear (36.2%), recreation, sports, and culture (32.4%), transport (28.5%), information and communication (22.6%), education services (17%), and insurance and financial services (11.2%).
Notably, the division with the lowest inflation rate was restaurant and accommodation services, at 6.9%.
Food and Non-Food Inflation
Food inflation experienced an upward trajectory from 54.2% in June to 55% in July. Similarly, non-food inflation increased from 33.4% to 33.8% during the same period.
Domestically produced items experienced inflation of 37.5%, while imported items saw an inflation rate of 45.7%.
Within the food inflation category, the highest inflation rates were observed for tea and related products at 150%, followed by cocoa drinks at 86.5%.
Regional Inflation Insights
Among our nation’s regions, the North East Region exhibited the highest inflation rate at 64%, followed by the Western North with 55.8% and Upper East with 50.2%. On the other hand, the regions with the lowest inflation rates were Ahafo Region, Ashanti Region, and Greater Accra Region.
