Ghana’s annual consumer price inflation slowed to 16.4% in January from 17% in December, easing for the first time in 12 months, data from Ghana Statistical Service showed. However, it remained significantly above the central bank's target band of 2pp either side of 13%.

Ghana’s annual non-food inflation rate, which has a 56.43% weight in the CPI basket, eased to 23% last month from 23.9% in December, with the growth in prices in the segment of housing, water, electricity, gas and other fuels decelerating to 32.3% from 35.2%. On the other hand, the rise in transport costs accelerated to 31.1% from 30.8%. Food inflation edged up to 6.9% last month from 6.8% in December.

The monthly CPI inflation rose to 3.4% last month from 1.0% in December.

Inflation remains a serious concern for Ghana’s ailing economy, which was hit by a significant loss of investor confidence as a result of a combination of weak governance and domestic energy challenges coupled with subdued global commodity prices that hurt the country’s key exports of gold, oil and cocoa. This resulted in a hefty depreciation of the local cedi currency, surging inflation, and a slowdown in economic growth. The government is now in talks with the IMF on a financial assistance programme that should restore macroeconomic stability and win back investor confidence.

At its latest policy meeting held on November 12, Ghana’s central bank lifted its main policy rate by 200bp to 21% in view of persistently high fiscal pressures that could prevent inflation from scaling back within the target band.