GhanaInflationInsightsMacroeconomic update

16 March 2023

Ghana’s February Inflation: Declining in drips and drabs

In brief

  • Annual inflation declined for the second consecutive month to 52.8% in February 2023, albeit in dribs and drabs over the past two months.
  • The decline in the year-on-year inflation was aided by moderation in price pressures for food items, although this was partly offset by an uptick in transport inflation in the month under review.
  • We view the stable Cedi in recent weeks as favourable for lower energy prices with a potential to cap the upside scope for transport inflation and trigger a downturn in non-food inflation in the near-term.
  • We also expect the benefit of a higher base effect to kickstart in March 2023 and intensify over the next 6-months. Consequently, we perceive scope for a faster decline in headline inflation over the next few months, potentially dropping below 50% in March 2023 and towards the high-30% area by mid-year.