Ghana’s inflation hits record high amid surging commodity prices

Economic Commodity Market
Commodity Market

Rising commodity prices pushed Ghana’s inflation rate to more than a 12-year record high in March, according to data released by the Ghana Statistical Service Wednesday.

Government Statistician Samuel Kobina Annim told the media that the inflation rate for March increased 3.7 percentage points to 19.4 percent from 15.7 percent in February.

The March inflation rate of 19.4 percent is the highest since August 2009, when Ghana recorded an inflation rate of 19.7 percent.

Annim attributed the rising inflation to the surging food and petroleum prices, exacerbated by the Russia-Ukraine crisis.

“Food inflation rate surged to 22.4 percent year on year in March from 17.4 percent in February, and non-food inflation also recorded a 17 percent year-over-year growth in March from 14.5 percent a month earlier,” said Annim. “The contribution of food and non-alcoholic beverages to overall inflation increased by 2.0 percentage points from 49.4 percent in February to 51.4 percent in March.”

The Bank of Ghana, the country’s central bank, has set a medium-term inflation target band between 6 percent and 10 percent for the country to anchor macroeconomic stability.

The bank responded to the current developments by increasing its benchmark lending rate by a record 250 basis points to 17 percent last month to tame ballooning commodity prices on the local market to curb the rising inflation.

The Bank of Ghana also announced that it would auction foreign exchange to bulk petroleum distribution companies at the prevailing central bank rate to curb the impact of foreign exchange depreciation on petroleum prices. Enditem

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