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Ghana Inflation May 2024

Ghana: Inflation declines to over two-year low in May

Inflation came in at 23.2% in May, down from April’s 25.1%. May’s result marked the lowest inflation rate since March 2022 and partly reflected a favorable base of comparison. That said, inflation moderated less than markets anticipated. Looking at the details of the release, prices for food and beverages increased at a weaker pace in May, while prices for transport rose at a quicker rate.

Accordingly, the trend pointed down, with annual average inflation coming in at 30.0% in May (April: 31.5%).

Finally, consumer prices rose a seasonally adjusted 3.15% in May over the previous month, following April’s 1.79% rise. May’s result was the highest reading since July 2023 and was due to the cedi’s slump against the U.S. dollar amid high demand for the greenback and lower cocoa output due to unfavorable weather and crop disease.

Our panelists expect inflation to ease further from current levels in what remains of this year, and roughly halve from 2023 overall in 2024. Disinflation will be driven by a still-restrictive monetary policy stance and a high base effect. A weaker-than-expected cedi is a key downside risk.

Still, our Consensus does not anticipate average inflation to return within the Bank of Ghana’s 6.0–10.0% target band until 2026.

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