Macroeconomic updateWest Africa

22 August 2022

Inflation On The Boil

In brief

  • Are you confused about inflation? You are not alone. Inflation remains the biggest anomaly in the world to date.


  • Like an ill wind that blows no good, the cost of everything is going up: electricity, diesel, vegetables, the internet, hotels, flights, and even, the cost of borrowing.


  • Much to the dismay of West Africa’s (WA’s) central bankers, inflation continues to break monthly records despite their raising interest rates in a bid to tame soaring inflation.


  • But the effects of monetary policy can take up to 12 months to materialise and are therefore unlikely to offer an instant solution to the most pressing challenges.


  • As inflation in the United States (US) came off the boil in July, the global inflation outlook is brighter and can bode well for local currencies if it persists.


  • But it is too early to throw a party.