It saw a month-on-month increase of 3.8 per cent from the November figure of 50.3 pushing it to record high since April 2001.

The April 2001 inflation stood at 59.7 per cent.

According to experts, this makes Ghana the country with the seventh-highest inflation rate in the world among 120 countries, including the Eurozone.

This is also the 20th consecutive time the rate had increased, a development which is expected to impact the already high lending rates, among other economic indicators.

In response to the consistent rising inflation, the Bank of Ghana has also consistently increased the policy rate to a 19 year high of 27 per cent, which has in turn increased the cost of borrowing in the country.

With the Monetary Policy Committee set to meet between January 24-27, analysts are wondering if the recent increase in inflation would cause the committee to further increase the policy rate.

In an interview with the Graphic Business, an Economist and Sustainable Banking Consultant, Eugene B.G Bawelle, said he did not foresee a surge in policy rate as a consequence of the hike in the current inflationary rates.

He said the cedi was beginning to find some stability amid a slowdown in exchange rate losses and this coupled with some reduction in prices of petroleum products in the month of January meant that the BoG was likely to stay the policy rate.

“Given that the rate of increase in inflation is beginning to slow down, the MPC is likely to keep the policy rate at 27 per cent,” he stated.

Inflation to slow down

The International Monetary Fund and other international agencies have all predicted global inflation to slow down in 2023.

The Managing Director of the IMF, Kristalina Georgieva, in a recent interview, said the fund was projecting inflation to slow down towards the end of the year, provided central banks stay the course.

She, therefore, advised governments not to take actions that would distort this projection.

The Economist Intelligence Unit (EIU) is also predicting that inflation in Ghana would average about 20 per cent in 2023.

Mr Bawelle, who is a lecturer at the Academic City University, said even though the impending IMF deal may lead to some slowdown in pressure on the cedi, key drivers of Ghana’s inflation would continue to linger in 2023.

He said food prices were expected to remain high as the Russia-Ukraine crisis worsens and affects food production.

“Imported inflation will not see significant reduction. The performance of the cedi and the outturn of petroleum prices will significantly impact inflation this year,” he stated.

Major drivers of December inflation

Last month’s inflation was driven by the housing, water, electricity, gas and other fuels division which recorded an inflation rate of 82.34 per cent.

This was followed by furnishings, household equipment (71.52 per cent); transport (71.42 per cent); personal care, social protection and miscellaneous goods and services (60.94 per cent); and food and non-alcoholic beverages (59.71 per cent).

All these divisions recorded inflation rates higher than the national average of 54.1 per cent.

The insurance and financial services and restaurants and accommodation service divisions recorded the lowest inflation rates of 10.76 per cent and 9.18 per cent, respectively.

Food inflation

Food inflation also increased from 55.3 per cent in November to 59.7 per cent for December, while non-food inflation also increased from 46.5 per cent to 49.9 per cent.

Inflation for locally produced items was 51.1 per cent while that of imported items was 61.9 per cent.

The food inflation of 59.7 per cent was driven by water which recorded an inflation rate of 94.2 per cent.

This was followed by fruit and vegetable juices (84.6 per cent); milk, other dairy products and eggs (82.2 per cent); tea, mate and other plant products for infusion (77.7 per cent); sugar, confectionery and desserts (76 per cent); cereals and cereal products (72.3 per cent); fish and other seafood (65.7 per cent); and ready-made food (59.8 per cent).

Others are live animals and meat (59.4 per cent); oils and fats (58.8 per cent); fruits and nuts (56.4 per cent); soft drinks (49.5 per cent); coffee and coffee substitutes (49.1 per cent); vegetables, tubers, and pulses (36.2 per cent); and cocoa drinks (28.2 per cent).

Regional inflation

The Greater Accra Region (66.7 per cent) took over from the Eastern Region (64.1 per cent) and the region with the highest inflation rate in December.

This was followed by Bono Region (60.3 per cent); Central Region (59.5 per cent); Savannah Region (59.3 per cent); Oti Region (50.9 per cent); Bono East (49.5 per cent); Western North (48.5 per cent); and North East (48.4 per cent).

The rest are Ahafo Region (47.6 per cent); Western Region (46.5 per cent); Ashanti Region (45.1 per cent); Upper East (43.6per cent); Northern Region (40.5 per cent); and Upper West (39.5 per cent).

The Volta Region recorded the lowest regional inflation rate of 35.6 per cent.