Ghana’s inflation rate has fallen from 20.3% to 19.2%, the first decline in five months, influenced by reduced non-food prices, while food inflation rises. New leadership at the Bank of Ghana under Johnson Asiamah may alter monetary policy to address these challenges amidst ongoing global economic pressures.
Ghana’s annual inflation rate has receded for the first time in five months, decreasing from 20.3% to 19.2% primarily due to a reduction in non-food price growth. However, food inflation continues to rise, now standing at 28.3%, with overall month-on-month price increases recorded at 1.7%. Government Statistician Samuel Kobina Annim highlighted that despite the recent decline, the rate of 23.5% remains notably high in comparison to previous months.
The latest inflation report also arrives amidst a pivotal leadership change at the Bank of Ghana, as President John Mahama appointed Johnson Asiamah as the new central bank governor, succeeding Ernest Addison. The implications of this transition may affect monetary policy as the new leadership assesses current economic conditions and challenges.
Globally, trade tensions initiated by U.S. tariffs threaten to elevate import costs, compelling the Bank of Ghana to consider adjustments in monetary policy. Asiamah remarked that the central bank remains committed to its core mandate and may explore strategic policy adjustments to navigate these challenges effectively.
Ghana’s inflation has persistently exceeded the central bank’s 10% upper target limit since September 2021, exacerbated by the depreciation of the cedi due to debt issues. To curb inflation and stabilize the currency, the Bank has significantly increased interest rates, currently holding at 27%. Officials anticipate gradual easing of price pressures as government measures tighten public finances.
Historically, Ghana has encountered substantial economic hurdles, with inflation peaking at 38.11% in 2023 and increasing from 31.26% in 2022. The new central bank leadership acknowledges the time required to revert inflation towards the target range of 6% to 10%, emphasizing the ongoing economic challenges that need to be addressed.
The latest report on inflation in Ghana marks a notable moment as it records the first decline in inflation rates in five months. The economic landscape has been complicated by external factors such as global trade wars, existing debt challenges, and changing leadership at the Bank of Ghana. With food prices continuing to soar, understanding the comprehensive economic strategies under the new administration is vital for anticipating future monetary policy and inflation trends.
In summary, Ghana’s inflation has experienced its first decline in five months due to lower non-food price growth, yet high food inflation persists. The appointment of Johnson Asiamah as the new governor of the Bank of Ghana may influence forthcoming economic strategies. While inflation continues to challenge Ghana’s economy, there are indications that price pressures could ease with prudent monetary policy and government action.
Original Source: globalsouthworld.com
