Ghana’s annual inflation rate surged to 23.8% in December 2024, its highest level in eight months, driven primarily by soaring food prices.
This development has reduced the likelihood of an interest rate cut by the Bank of Ghana later this month.
The Government Statistician, Professor Samuel Kobina Annim, announced the figures at a press briefing in Accra on Wednesday, attributing the increase to rising costs of vegetables and cooking bananas.
December’s inflation rate reflects a marginal rise from November’s 23.0%, marking the fourth consecutive monthly increase after a five-month decline.
Food inflation jumped significantly, rising from 25.9% in November to 27.8% in December, while non-food inflation saw a slight drop, from 20.7% to 20.3%.
Professor Annim elaborated on the figures, stating:
“In December 2024, average prices of goods and services went up by 23.8%, indicating that, on a year-on-year basis between December 2023 and December 2024, general price levels increased by 23.8%.
This follows a marginal increase of 0.8 percentage points from the November 2024 inflation rate of 23.0%.”
He highlighted a 7.5 percentage point gap between food and non-food inflation, emphasizing the dominant role of food prices in driving the upward trend.
Missed Inflation Target
The government’s end-of-year inflation target of 15% was significantly missed, raising concerns about the country’s economic recovery.
Persistent high inflation erodes purchasing power, increases the cost of living, and threatens overall economic stability.
This latest inflation surge presents a critical challenge for the administration of President John Dramani Mahama, who assumed office in January 2025.
MmAddressing the rising cost of food and implementing policies to curb inflationary pressures will be key priorities for the new government.
Analysts suggest that without targeted interventions, such as enhancing agricultural productivity to stabilize food prices and tightening monetary policy, Ghana’s economy could face further strain.
The Bank of Ghana is expected to closely monitor these developments before making its next monetary policy decision, as inflationary pressures weigh heavily on the nation’s fiscal outlook.
