The Bank of Ghana (BoG) has identified rising food prices as the key driver behind the recent uptick in inflation. According to the BoG’s Monetary Policy Committee (MPC), inflation increased from 20.4% in August 2024 to 21.5% in September, reaching 22.1% in October.
In a statement released after the MPC’s meeting on Friday, November 29, the BoG noted that this inflation surge is largely due to food price pressures and exchange rate pass-through effects from earlier currency depreciation. The Central Bank emphasized that, despite the current increase, the year-on-year inflation rate of 22.1% for October 2024 represents a significant drop from the 35.1% recorded in October 2023, indicating an overall easing in inflationary pressures.
Food prices rose by 22.8% in October, driven by a 0.3% month-on-month increase, while non-food inflation remained steady at 21.5%. Core inflation, which excludes volatile items such as energy, utilities, and food, eased to 19.1%, signaling some stabilization in underlying inflation trends. However, the BoG acknowledged that challenges in both food and non-food pricing persist.
Despite inflationary pressures, the BoG highlighted positive economic developments. The Bank reported sustained growth in economic activity and macroeconomic stability, with high-frequency indicators pointing to continued strength in the domestic economy.
The BoG further noted that real sector indicators for the third quarter of 2024 show a continued pick-up in economic activity, reinforcing confidence in the country’s economic recovery trajectory.
Overall, the Central Bank remains cautiously optimistic about the economy’s performance, while recognizing the ongoing challenges in managing inflation.
