Ghana inflation hits 20.34%

Ghana’s annual inflation rate increased to 20.34 percent in February, the highest in more than five years, as food prices increased, the Ghana Statistical Service said.

Inflation accelerated from 19.9 percent in January, Grace Bediako, a statistician at the service, told reporters today in the capital, Accra. Food prices rose 2.46 percent in the month, she said.

The increase in the inflation rate was “not unexpected” as annual price increases announced in December usually continue in the first two months of the year, Bediako said. “By March, the system seems to settle and that’s when we see a different trend.”

The highest inflation rate since January 2004 prompted the Bank of Ghana to increase its key lending rate by 1.5 points to 18.5 percent at its last monetary policy committee meeting on Feb. 24.

The depreciation of the cedi against the dollar has also contributed to higher inflation, by raising the cost of imports, Ebo Duncan, a statistician at the institute, said at today’s briefing. The cedi has dropped 18 percent against the dollar in the past six months on concern the country will struggle to finance its widening current account and fiscal deficits.