Inflation Rate Ends 2024 at 23.8%

The rate of inflation defied the government’s revised year-end inflation target as the prevalence of underlying risks to the inflation outlook pushed the consumer price index to record its fourth successive increase. The government in its mid-year budget review kept its end-period headline inflation rate unchanged at 15.0% following a slowdown in the inflation reading in the second to third quarter of the year. This however failed to materialize following a resurgence of pressures on the local currency which was further exacerbated by a pickup in the price of petroleum products and food prices.

According to the latest consumer price data released by the Ghana Statistical Service, the headline inflation rate hardened from 23.0% in November to print at 23.8% in December, its highest in eight months. This largely came on the back of increases in the prices of some food items around the festive season with some items such as ginger, dried pepper, beans, and onions among others recording inflation rates in excess of 75.0%. Month-on-month inflation between November and December 2024, however, slowed to 1.8% from 2.6%.

Food inflation continued to dominate the inflation basket as it rose for the fourth consecutive time to print at 27.8% in December recording a steady increase from a 2024-year low of 19.1% in August. Month-on-month food inflation recorded a disinflation from 3.8% in November to 2.8% in December. Vegetables, tubers & plantains with rates of 46.1% (yoy) and 4.9% (mom) recorded the highest inflationary number in the food category.

Both the inflation numbers on the annual and month-on-month for the non-food category sustained a decline to end the year at 20.3% and 0.9% in December from 20.7% and 1.4% respectively in the previous month. The disinflation recorded by the non-food category items was led by Alcoholic beverages, Housing & utilities, and Transportation which recorded significant monthly decreases to close the year at 1.5%, 1.7%, and 0.2% respectively.

Across the regions, the inflation rate ranged from 16.8% in the Eastern region to 40.6 % in the Upper East region. Inflation on both local and imported items concurrently soared for the second consecutive time to print at 26.4% and 17.9% in December from 25.4% and 17.6% in November respectively.

The Monetary Policy Committee in 2024 handed down only two policy shifts, beginning the year with a monetary policy rate of 30.0% and closing the year with a rate of 27.0% as inflation remained largely stable with no observable spikes. Although inflation continues to see a rise, the committee would be expected to remain glued to its wait-and-see stance as it readies to deliver its first policy direction for the new year.