Ghana’s annual inflation rose to 17.4 percent in November from 17.3 percent in October, breaking a four-month downward trend, data from the Ghana Statistical Service showed on Friday, December 12, 2008.
Annual inflation in the West African country peaked at 18.4 percent in June, way above the 2008 budget’s initial target range of 6-8 percent, as high world oil and food prices led to domestic price rises.
“The main contributor to the overall inflation is the non-food group led by hotels, cafes and restaurants, which contributed 10.23 percent, while food items led by vegetables, bread and cereals contributed 7.21 percent,” said Ebow Duncan, head of economic statistics at the Statistical Service.
The gold- and cocoa-producing country held inconclusive presidential elections on Sunday, and a run-off between the two main candidates has been scheduled for December 28.
Both men standing have promised economic development in a country where hopes of greater and more widespread prosperity are closely linked to offshore oil, which is expected to come onstream in 2010.
The impact of campaign spending may be felt in inflation figures for this month.
“In the event of the politicians dishing out money to the people, that may lead to more money in the system and more spending during this Christmas period, and this could significantly affect inflation, especially for December,” Duncan said.
More important than the slight uptick in inflation was Ghana’s large fiscal deficit, estimated at 10 percent of GDP, an analyst said.
“It’s not a big increase,” said Samir Gadio, financial economist for Sub-Saharan Africa at Renaissance Capital.
“Really the critical issue in 2009 is going to be how to at least contain to a certain extent that deficit.”
Credit: Kwasi Kpodo