Inflation in Ghana, Uganda, and Burundi is expected to rise by more than 3 percentage points this year, causing it to remain above 50% this year.
This revelation was made in the World Bank's Africa Pulse Report for April 2023. According to the report, most countries in the region will have peaked for the inflation rate, but that's not the case for Ghana and two other countries.
The report stated that “despite the declining inflation rates across many countries in the region, the rates of consumer price growth are still high, above target, and above pre-pandemic levels.” This is due to the differences in the evolution of external and fiscal balances as well as debt dynamics.
Furthermore, the World Bank noted that cross-country differences in the evolution of external and fiscal balances as well as debt dynamics are present in countries' inflation rates.
It pointed out that bringing down inflation and anchoring inflation expectations should continue to be a priority for policymakers, to prevent further deterioration of people's incomes and food security and avert social unrest and conflict.
The report also revealed that the inflation rate in Ghana for 2022 was the highest in Africa, with 75% of Sub-Saharan countries recording double-digit inflation rates. The fastest increases were experienced in Zimbabwe, Sudan, Ghana, Rwanda, Sierra Leone, Burundi, Malawi, and Ethiopia.
The World Bank further explained that domestic food inflation in Africa has remained high in some countries while it has decelerated in others. It attributed this to currency depreciation, high input costs, and extreme weather events like droughts in the Horn of Africa.
The report, therefore, advised that policymakers need to prioritize bringing down inflation and anchoring inflation expectations to prevent further deterioration of people's incomes and food security.
