Understanding Ghana’s High Inflation Rates: Causes and Impacts

2023-09-16 16:18:46

According to data just published by the National Institute of Statistics, at the end of August 2023, the inflation rate peaked at 40.1%, down 3 points. But the food component of inflation, the one which hits households hard, continues to flare up to stand at 51.9% despite a slight decline compared to July.

Year-on-year, the inflation rate recorded a drop of 3 percentage points to 40.1% at the end of August 2023, according to data published by the National Institute of Statistics, Wednesday September 13. Its analysts note a more significant decline in the food share of inflation even if it remains at a very high level (51.9%) compared to the inflation of non-food goods estimated at 30.9%. This is 3.1 points less compared to the month of July.

Since the end of the Covid-19 pandemic, Ghana has been plunged into an inflationary spiral that the authorities are struggling to contain. With inflation increasing by double digits since the start of 2022, peaking at 54.1% at the end of last December, the purchasing power of the lowest-income households is literally pulverized. These are the ones who devote the largest part of their budget to food. The Bank of Ghana is simply outdated. Its only response, which resembles a placebo, is to raise the key rate which currently stands at 30%. As in most countries in sub-Saharan Africa, the monetary treatment of inflation is simply ineffective given the very low banking rate of the populations.

Par ALSO WITHEditorial committee –
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