Ghana’s inflation is expected to end 2024 at 20.9%, the African Development Bank has revealed in its updated 2024 African Economic Outlook.
This is higher than the 17.4% it earlier predicted.
It also means inflation would remain outside the Bank of Ghana’s bound of 8%±2.
AfDB said the outlook is clouded by several factors.
These are the impact of fiscal consolidation under the post-Covid Programme for Economic Growth, the lingering effects of Russia’s invasion of Ukraine, limited access to finance and foreign exchange, and global macroeconomic shocks.
However, it said prudent macroeconomic management policies could mitigate the risks.
Furthermore, it said the Consumer Price Index would narrow to 11.1% in 2025.
Meanwhile, the average consumer price inflation in Africa is estimated to have increased by 3.0 percentage points to 17% in 2023, from 14.0% in 2022.
East Africa recorded the highest inflation at 26.5% in 2023, with Sudan leading the way at 245.3%. West Africa has the second highest at 20.3%, with Sierra Leone and Ghana topping the list.
The report said the higher inflation across Africa has eroded socioeconomic gains made before the COVID-19 outbreak.
The increase reflects a combination of higher local food prices induced by drought-related domestic supply shortages, liquidity overhangs from pandemic-related fiscal and monetary policy stimulus undertaken in 2020–21, and the pass-through effects of currency depreciation against a strong US dollar propelled by high interest rates in the United States. Across regions, the inflation picture is mixed.
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