GhanaInflationInsightsMacroeconomic update

16 February 2023

Ghana’s January Inflation: Stronger Tailwind, Receding Headwind

In brief

  • Headline inflation declined by 50bps to 53.6% year-on-year (y/y) in January 2023 as a rise in food inflation (61.0%) was outweighed by a sharper drop in non-food inflation (47.9%) in the month under review.


  • After nineteen (19) consecutive months of increases in the year-on-year headline inflation, the lower print in January 2023 deepens our view for a near-term trend reversal. Barring unexpected FX shocks, stable global energy prices should provide a tailwind to support domestic disinflation from March 2023.


  • The decline in headline inflation in January 2023 will strengthen the MPC’s view on lower inflation expectations and potentially justify an end to the rate hiking cycle, which commenced in November 2021. However, inflation will remain too high for a near-term pivot on the monetary policy rate.


  • Yields for Treasury bills have peaked since late November 2022, moving along the 35.0% – 36.0% band as the Treasury baits investors at the front-end of the yield curve amidst the higher inflation and restructuring of domestic bonds. We however foresee downside risks to the short-term yields on account of the ebbing inflation pressures and completion of the domestic debt restructuring.

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