Ghana’s inflation rate climbed to the highest level in more than 18 years in April, underscoring the dilemma the central bank faces in trying to balance its efforts to stop intolerable price growth from persisting and boost the economy. 

Annual inflation quickened to 23.6%, the highest since January 2004, from 19.4% in March, Government Statistician Samuel Kobina Annim told reporters Wednesday in Accra, the capital. The median estimate of five economists in a Bloomberg survey was 21.2%.

Headline inflation, stoked by higher costs of imported goods such as cooking oil and gasoline due to the war in Ukraine and Indonesia’s ban on palm oil exports, is now more than twice the top of the central bank’s target band of 6% to 10% and has been above the range for eight months. For the first time in 29 months imported items surpassed locally produced items, Annim said.

Food-price growth surged to 26.6% year-on-year from 22.4% in March and non-food inflation accelerated to 21.3% in April from 17% the previous month. Prices jumped 5.8% in the month. 


“The monetary policy committee of the central bank will have a nail-biting decision to make,” Courage Martey, an economist with Accra-based Databank Group, said by phone ahead of the release.  

While inflation is high it is also straining economic growth together with slowing global output and a 2.5 percentage point increase in March in the key interest rate, the biggest hike since at least 2002. The S&P Global Ghana Purchasing Managers’ Index has been below 50 since February, indicating a deterioration in business conditions. 

“Any attempt by the central bank to tighten monetary policy further will be an attempt to squeeze water out of stone,” Martey said. “Inflation hasn’t peaked yet, so the MPC would want to avoid creating a perception of chasing inflation when it should be ahead of the inflation curve.”

Ghana’s MPC is scheduled to announce its next rate decision on May 23.


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