The decline in import expenses brought down the country’s consumer price index in April to 21.2%, compared to 22.4% the month before, making it the fourth consecutive month Ghana’s inflation is dropping.
Government Statistician Alhassan Iddrisu made this known to reporters in the capital, Accra, on Wednesday.
He noted that, rise in non-food prices slowed to 17.9% in April from 18.7% in March, as import costs fell.
This drop in inflation is following a pattern that has been persistent since the current president John Mahama assumed office.
In March, inflation figures dropped to 22.4% from 23.1% in February, as per data from the Ghana Statistical Service (GSS).
Then the decline in inflation came shortly after the Bank of Ghana (BoG) made an unexpected decision to raise its benchmark interest rate by 100 basis points to 28%.
However, for April, reports indicate that the country’s impressive currency performance is primarily the reason for the inflation decline.
In April the Tunisian Dinar, Moroccan Dirham, Seychellois Rupee, and Ghanaian Cedi, posted stronger values than the month prior.
Inflation in Ghana and interest rates
According to figures provided by Bloomberg, the currency has risen about sixteen percent versus the dollar since the beginning of April, making it the best-performing currency globally.
Agyapomaa Gyeke-Dako, a senior lecturer and economist at the University of Ghana Business School, assessed that the data is unlikely to convince the central bank to cut interest rates later this month because it is still looking for additional proof of a slowdown in price growth following its unexpected 100 basis-point increase in March to 28%.
In order to “mop up any excess liquidity, the central bank action going forward may not readily reduce the monetary policy rate yet because there might still be some threats to inflation coming from the hikes in utility prices,” she stated prior to the data release, implying that it tightened at its most recent meeting.
Inflation in Ghana remained above 10%, exceeding the central bank’s target range, since September 2021, driven by a debt crisis that weakened the cedi and raised the cost of imports.
The Monetary Policy Committee forecasts that inflation will ease to around 16% by year-end and fall back within the 6% to 10% target range by the second quarter of 2026.
