Ghana’s annual inflation rate ended December 2024 with a notable increase of 80 basis points, climbing to 23.8%.
According to data from a bulletin released by the Ghana Statistical Service (GSS) in early January, this rise was primarily driven by significant increases in the prices of food and non-alcoholic beverages.
The report highlighted a consistent marginal increase in inflation over four consecutive months, climbing from 23% in November to 23.8% in December.
This December figure marks the highest inflation rate since April 2024, when it stood at 25%, surpassing May’s rate of 23.1%.
Food and non-alcoholic beverages emerged as the primary contributors to this inflationary trend, rising sharply from 25.9% the previous month to 27.8%.
Conversely, the non-food sector experienced a slight decline, with inflation decreasing by 40 basis points to 20.3%, down from 20.7% in November.
December’s inflation rate of 23.8% ranks as the third highest of the year, following April’s 25% and March’s 25.8%.
Food inflation
Food and non-alcoholic beverages, the primary drivers of inflation, saw their rate rise sharply from 25.9% in the previous month to 27.8% in December 2024.
- Within this category, vegetables, tubers, plantains, cooking bananas, and pulses experienced a significant surge, recording an inflation rate of 46.1%, the highest for the month.
- Fruits and nuts followed, with an inflation rate of 36.9% year-on-year in December, down from a peak of 43.3% in June.
- Fruits and vegetable juices recorded a year-on-year inflation rate of 32.7% in December, following their highest increase of 33.1% in April.
Meanwhile, tea, maté, and other plant-based infusions, which soared to 75.4% year-on-year in March, saw a dramatic decline, tapering to 11.9% by December 2024.
Non-food sector
While overall non-food prices remained steady at 20.3% in December 2024, specific subclasses experienced notable spikes.
- Leading the rise were alcoholic beverages, tobacco, and narcotics, which recorded a 1.5% month-on-month increase from November, culminating in a year-on-year surge of 28.4%.
- Housing, water, electricity, gas, and other fuels posted the highest month-on-month rise at 1.7%, resulting in a year-on-year increase of 26.3%.
- The health sector also witnessed significant inflationary pressures, with a 21.4% year-on-year increase, driven by a 0.8% rise in December alone.
- Similarly, clothing and footwear registered a 20.0% year-on-year surge.
The inflationary pressures were most pronounced during the first and second quarters, where alcoholic beverages, tobacco, and narcotics peaked at 41.0%, while health costs escalated to 32% in March, before easing in the latter half of the year.
Inflation and cedi depreciation
The Ghanaian cedi depreciated by 22.6% year-to-date in 2024, closing December at 14.65 GHS per US dollar, compared to its opening rate of 11.95 GHS in January.
For 10 consecutive months, the cedi experienced a slow but steady decline, peaking at 16.25 GHS in October 2024.
However, likely supported by favorable policies and improved sentiment after the elections, the currency stabilized, returning to the 14 GHS range by year-end.
The heightened depreciation of the cedi in Q1 and Q2 coincided with escalating inflationary pressures during the same period.
