September 2022 SSA Inflation Update - Ghana retains top spot on the inflation chart
Ghana retains top spot on the inflation chart
Inflation remained on the uptrend in 6 out of the 10 top economies in Africa. Compared to August, the largest uptick was observed in Ghana (+3.3%), Kenya (+0.7%) and Morocco (+0.3%). On the flip side, inflation sustained a downtrend in Ethiopia (-1.8%), Angola (-1.6%), and South Africa (-0.1%). In addition to current energy-induced inflationary pressures, we note that rising sea levels and other extreme weather conditions pose significant upside risk to inflation.
New CPI series confirm Ghana’s inflationary trend
In a recent CPI rebasing exercise, Ghana changed its reference year (from 2018 to 2021) and expanded its administrative regions for computational reasons to 16 (from 10). Post-rebasing, headline inflation sustained its uptrend, rising to 37.2% y/y. Currency depreciation (-56% YTD) and adjustment in utility tariffs (+68% y/y) were key drivers of inflationary pressures. To combat inflation, the benchmark interest rate was raised further by 250bps to 24.5% in October, bringing the cumulative hikes in 2022 to 1000bps.
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