GhanaInflationInsightsMacroeconomic update

12 January 2023

Ghana’s December Inflation: The Upswing Continues

In brief

  • Headline inflation raced to 54.1% year-on-year in December 2022 (vs 50.3% in November), beating our estimate by 90bps and the market expectation by 135bps.


  • The price pressures remained broad-based with food inflation rising to 59.7% (vs 55.3% in November) while non-food inflation climbed to 49.9% (vs 46.5% in November 2022).


  • Notwithstanding the moderation in the rate of increase in headline inflation, we observed that the 380bps increase in headline inflation is still higher than the 2022 average increase of 280bps (excl. the 990bps surge in November 2022). We believe this performance trend suggests that headline inflation could still rise in the next month, although it seems much closer to the peak.


  • In our November 2022 inflation update, we called a policy rate hike of up to 200bps for 1Q2023, taking our forecast terminal rate to 29.0%. We maintain this upside view on the policy rate with the January 2023 MPC meeting providing the earliest opportunity for the Central Bank to sustain the signalling of its commitment to price stability.