Fitch Solutions has forecasted that Ghana's inflation rate will ease in the short term, ending 2024 at 20.8%, according to their "Ghana Inflation 2024 Consumer Outlook" report. Despite this positive trend, inflation will average 22.1% for the entire year, reflecting a significant reduction from the peak rate of 54.1% observed in December 2022.Inflationary pressures have already started to abate, with the rate falling to 20.9% in July 2024.

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Looking ahead, Fitch Solutions predicts that inflation will continue to decline into 2025, averaging 16.2% year-on-year. However, this rate remains above pre-pandemic levels, which saw an average inflation rate of 12.4% per year from 2015 to 2019. This ongoing inflationary pressure underscores the continued financial strain on consumers.The report notes a favorable trend in food prices, which are expected to decline further.

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This decrease in food inflation is anticipated to positively impact consumer spending on other goods and services. Food and non-alcoholic drinks account for over 42% of total household expenditure in Ghana, so easing food inflation should help alleviate some financial pressure on consumers.Nevertheless, certain key spending areas are experiencing rising inflationary pressures.

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Housing and utilities, as well as transport prices, have seen significant increases. Transport inflation surged from 5.6% year-on-year in January 2024 to 18.1% year-on-year by July 2024. Similarly, housing and utilities inflation rose from 22.6% year-on-year to 28.6% year-on-year over the same period. These rising costs in crucial household spending categories could pose challenges for consumer budgets and spending patterns.

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Fitch Solutions' report highlights the mixed economic landscape for Ghanaian consumers, with easing overall inflation tempered by rising costs in essential spending areas. This situation emphasizes the need for ongoing attention to inflation management and its impact on household finances.

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