Ghana’s inflation rate fell to 22.8% in June 2024, continuing a downward trend from 23.1% in May. June’s inflation rate is the lowest recorded since April 2022.
According to the Ghana Statistical Service, this decline was driven by a reduction in the month-to-month inflation rate, which dropped to 2.9% in June from 3.2% in May. However, food inflation increased to 24% from 22.6% in May.
The decrease in inflation has led to expectations of further rate cuts from the Bank of Ghana (BoG), which had already lowered its policy rate from 30.00% to 29.00% in January 2024. The central bank paused rate cuts in March after inflation rose to 25.8%, but with the ongoing decline, analysts predict another potential 100 basis point cut at the BoG’s July 29 meeting.
Ghana’s benchmark interest rate remains one of the highest in Africa at 29%. This contrasts sharply with Nigeria’s rising inflation rate of 33.95% as of May 2024.
Additionally, Ghana is making progress in debt relief efforts, having reached an agreement with $13 billion bondholders as part of the IMF’s $3 billion extended credit facility. This agreement is expected to result in $4.7 billion in debt relief from Eurobond holders, alongside a separate deal with bilateral lenders for $2.8 billion in relief.
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