Ghana inflation rises to 40.4% in October

7:33 am Wednesday, November 09th, 2022

By Cooper Inveen and Christian Akorlie

ACCRA (Reuters) -Ghana’s annual consumer inflation rose to a new 21-year high of 40.4% in October, accelerating from 37.2% in September, data showed on Wednesday, after a month of rapid currency depreciation deepened an economic crisis.

Ghana’s cedi had one of its worst months on record in October and has lost around half its value against the dollar in 2022. It has been Africa’s worst performing currency this year, according to the World Bank.

“It’s possible that the impact of the exchange rate changes will linger on for some number of months,” said government statistician Samuel Kobina Annim, adding the duration of the impact would depend on how effective polices are in the next two to three months at mitigating the effects.

It is not clear yet whether inflation has peaked, he said.

October inflation was highest in the category of housing, water, electricity and gas, with prices up 69.6%. Furniture, household equipment and maintenance came second, at 55.7%, and transport, including fuel, was third at 46.3%.

Food inflation rose to 43.7%, from 37.8% last month, driven higher by items such as water, milk, eggs and sugar, according to the statistics agency.

Ghana’s dollar-denominated sovereign bonds fell, on a day when many emerging market assets were gaining on hopes that the U.S. Federal Reserve would pare back its interest rate hikes. Its longest-dated 2061 maturity was down the most, by 0.742 cents to 32.675 cents on the dollar.

More than a thousand demonstrators took to the streets of the capital Accra on Saturday to demand the president’s resignation, as fuel and food prices continue to spiral. Small businesses closed their doors for several days last month to protest rising costs.

The central bank has hiked its main lending rate by 10 percentage points since the start of the year in attempt to hold back inflation and slow the cedi’s depreciation. The next monetary policy meeting is slated for the end of this month.

(Additional reporting by Rachel Savage in Johannesburg;Writing by Nellie Peyton; Editing by Alexander Winning, Kirsten Donovan)