Ghana’s inflation dynamics in 2024 reflected a complex interplay of economic, market, and policy factors, showcasing patterns of rises, moderation, and periodic declines. The Ghana Statistical Service (GSS) briefing on December 2024’s Consumer Price Index (CPI) and inflation metrics highlights these trends, offering valuable insights into the drivers of inflation and its regional and categorical impacts.
Overview of December 2024 Inflation
December 2024’s inflation data marked a significant point in the year’s inflationary trends. The CPI reached 248.3 points, representing a 23.8% year-on-year increase from December 2023’s CPI of 200.5 points. Month-on-month inflation between November and December was recorded at 1.8%, reflecting a slight moderation compared to earlier peaks in the year.
Food inflation continued to dominate the overall inflationary picture, with December 2024’s food inflation at 27.8%, significantly higher than non-food inflation at 20.3%. Notably, inflation for locally produced items stood at 26.4%, while imported items recorded a lower rate of 17.9%. This highlights the disproportionate influence of domestic food production on inflation rates.
Regional Disparities in Inflation
Inflation varied widely across Ghana’s regions. The Upper East Region experienced the highest overall inflation at 40.6%, while the Eastern Region recorded the lowest at 16.8%. Food inflation was particularly high in the Upper West Region at 46.0%, whereas the Volta Region recorded the lowest food inflation at 20.3%. Non-food inflation peaked in the Upper East Region at 41.2% and was lowest in the Eastern Region at 12.2%.
Inflation Trends in 2024
The year 2024 saw average year-on-year inflation at 22.95% and monthly inflation at 1.77%. The inflation trajectory exhibited cyclical fluctuations, with notable peaks and troughs. The highest inflation rate was recorded in March 2024 at 25.8%, driven by increased costs in goods and services. This was followed by a gradual decline to 20.4% in August, the lowest for the year. However, the year ended with a resurgence in inflation, culminating in December’s 23.8%, the third highest rate for the year.
Food inflation consistently remained the primary driver, particularly subcategories such as vegetables, tubers, and pulses, which saw annual price changes as high as 46.1%.
Key Observations
- Stability and Variability: Inflation rates stayed between 20% and 25% for most of 2024, reflecting relative stability despite some fluctuations. Monthly inflation experienced sharp movements, with May 2024 recording the highest monthly increase at 3.2% and August witnessing a rare deflation of -0.7%.
- Drivers of Inflation: Food inflation was the leading contributor, underscoring the impact of agricultural production and pricing dynamics on the overall inflation rate. Non-food categories such as housing, electricity, and transportation also played significant roles.
- Regional Patterns: Regional disparities highlighted the varying economic conditions across Ghana, with northern regions generally experiencing higher inflation rates than southern regions.
Analysis and Implications
The trends observed in 2024 underline the importance of targeted economic policies to address inflation drivers. Stabilizing food production, managing supply chain inefficiencies, and controlling non-food price pressures are critical to maintaining inflation within manageable limits.
For businesses and stakeholders in the real estate sector, inflation trends affect purchasing power, property prices, and construction costs. Understanding these dynamics helps in strategic planning and market positioning.
Conclusion
The December 2024 inflation data, alongside yearly trends, provide a comprehensive view of Ghana’s inflationary pressures. These insights serve as a basis for economic and policy interventions aimed at fostering stability and growth in the years to come. At Orient Property Consulting, we continue to monitor these developments to provide informed advice and strategic solutions for our clients in Ghana’s dynamic real estate landscape.
