The Bank of Ghana anticipates that the ongoing disinflation process will persist, ultimately leading to a return of headline inflation to the target within the medium-term.
Nevertheless, the bank advises vigilance regarding potential risks to this disinflation path, such as heightened utility tariffs and fluctuations in commodity prices, with a particular focus on the volatility of crude oil prices.
“The disinflation process is expected to continue to ensure that headline inflation returns to target in the medium-term. However, risks to the disinflation path include increased utility tariffs and volatility in commodity prices, especially, crude oil prices”.
“These risks to the inflation outlook will be moderated by the tight monetary policy, relative stability in the local currency, and some base drift effects”, it said in the September 2023 Monetary Policy Report.
The Central Bank further stated that headline inflation has seen a cumulative decrease of 14.0% since its peak at 54.1% in December 2022.
Additionally, non-food inflation has significantly dropped by nearly 20%, indicating the overall effectiveness of monetary policy.
“All the Banks’ measures of core inflation are on a downward trend, indicating continued easing of underlying inflationary pressures. In addition, one-year ahead survey-based inflation expectations seem well anchored”.
Inflation in September 2023 decreased to 38.1% from the August 2023 figure of 40.1%, as reported by the Ghana Statistical Service.
The data reveals that both food and non-food inflation experienced reductions. Food inflation dropped to 49.4% from the previous 51.9% recorded in August 2023, while non-food inflation decreased to 29.3% from the 30.9% recorded in August 2023.