According to Fitch Solutions, inflation in Ghana is projected to average 16% in 2024. However, it expects inflation to average 37.6% in 2023, which is higher than the 31.5% recorded in 2022.
Fitch Solutions stated in its latest assessment of Ghana that policymakers will remain focused on controlling price growth in the short term as they aim for a more substantial disinflation trajectory before concluding the tightening cycle.
Fitch Solutions expects the Bank of Ghana (BoG) to maintain its current monetary policy. According to Fitch Solutions, the BoG will likely be encouraged to keep the policy rate elevated to “strengthen its monetary policy framework” under an expected IMF program.
Fitch Solutions believes that the return of positive real interest rates will result in more capital inflows, mitigating risks to Ghana's external position.
Inflation will Ease Through 2023
Additionally, Fitch Solutions said inflation will ease through 2023 but remain well above the Bank of Ghana's target range of 6.0-10.0%.
Year-on-year inflation for the month of February 2023 slowed down to 52.8%, according to the Ghana Statistical Service.
This was a reduction from the January 2023 estimate of 53.6%, influenced by the fall in inflation of transportation and other non-food items.
It was also the second consecutive time that the rate dropped in 20 months. In January 2023, inflation fell marginally to 53.6%, from 54.1% recorded in December 2022.