Economist Dr. Theo Acheampong has attributed the drop in inflation to seasonal factors. Inflation fell to 20.9% in July, marking the fourth consecutive month of decline. This reduction, announced by Government Statistician Professor Samuel Anim on Wednesday, August 14, reflects a 1.9 percentage point decrease from June’s 22.8%, indicating a gradual easing of the economic pressures that plagued the country throughout 2023.
The breakdown of inflation figures shows that food inflation stood at 21.5% in July, while non-food inflation was slightly lower at 20.5%. Notably, inflation for imported items was 15.6%, a sharp contrast to the 23.3% recorded for locally produced goods. This sustained decline, which began in April 2024, points to a steady cooling of price growth across sectors. Month-on-month inflation was however 2.1%, indicating that on the average, price levels were still higher in July compared to June of this year.
Dr. Acheampong highlighted these trends in a post on his X platform, pointing out the seasonal factors influencing inflation. He said the current period is a bumper season for local produce, which coincides with the festivals in many towns and villages from August to September. This abundance allows people, especially in rural areas, to adjust their dietary preferences, reducing pressure on prices.
He noted, “It is not all about the exchange rate pass-through, as some mistakenly think. A deeper look at the data reveals structural and seasonal dynamics at play. A decomposition of inflation in Ghana shows very interesting trends.”
This means that at certain times of the year, underlying makeup of the economy can cause prices to rise or fall in specific ways. During the harvest season, when local produce is abundant, prices tend to drop, which is a seasonal effect. Meanwhile, structural factors like how much of what we consume is imported versus locally produced also play a role in shaping overall inflation.
Dr. Acheampong further stressed that while these dynamics are critical, only three key metrics—Inflation, Interest Rates, and the Exchange Rate—truly matter for the average Ghanaian. He warned that politicians often manipulate these figures to serve their interests by using different base years or focusing on nominal rather than real figures. “Shine your eyes, my people,” he urged, encouraging Ghanaians to critically analyze the numbers.
