ACCRA - Data released on Wednesday indicated that consumer inflation in Ghana increased further, reaching its highest level since 2001 just weeks after the biggest lending rate increase in the nation's history, rising to 33.9% in annual terms in August from 31.7% in July. In response to the economy's sharp decline, the central bank raised rates by 300 basis points to 22% last month during an emergency meeting. Additionally, the government is now negotiating a financial assistance package with the International Monetary Fund (IMF).
According to statistics released on Wednesday, prices for imported goods increased 35.2% in August while prices for domestic goods increased 33.4%. In terms of price increases, transportation, which includes gasoline, was second only to housing, water, electricity, and gas.
The largest contributor to food inflation in August was oils and fats, which increased 34.4% year over year. The nation that produces cocoa and gold announced in July that it would seek IMF assistance as its balance of payments situation deteriorated. The COVID-19 outbreak, the conflict in Ukraine, the economic downturn in the United States and China, and other factors have all been cited as causes of the government's problems. After a rapid decrease in the first half of August, the devaluation of the Ghanaian cedi currency has largely stabilized in the wake of the central bank's emergency rate hike. Since the year's conclusion, it has lost roughly a third of its value against the dollar.
According to Mark Bohlund, a credit analyst at Redd Intelligence, foreign holders of Ghana's local currency debt sold a record 4.5 billion cedis ($454.55 million) of debt in August after selling 3.2 billion cedis in July. He claimed that the repatriation of these monies may have been a major factor in the cedi's decline during the month. (Christian Akorlie and Cooper Inveen reported it; Rachel Savage in London added to it; Alexander Winning and Mark Porter edited it.)
