Inflation for imported items in Ghana declined by 1.9 percentage points, settling at 15.6% in July 2024, down from 17.5% in June 2024, according to the Minister for Finance, Dr. Mohammed Amin Adam.

This was revealed during a press engagement on Thursday, August 29, 2024, where the Minister highlighted the country's economic progress.

Imported inflation refers to the increase in the prices of goods and services that are brought into the country from abroad. This form of inflation is influenced by factors such as exchange rates, global market conditions, and tariffs, which can affect the cost of imports.

Overall inflation in Ghana also showed improvement, with the rate declining to 20.9% in July 2024 from 22.8% in June 2024. The month-on-month inflation rate decreased from 2.9% in June to 2.1% in July, largely due to a slowdown in the prices of both food and non-food items.

Dr. Amin Adam noted that food inflation saw a significant drop, declining by 2.5 percentage points to 21.5% in July from 24% in June. Similarly, non-food inflation fell by 1.1 percentage points, from 21.6% in June to 20.5% in July.

In addition to these positive inflation trends, the Ghanaian cedi has shown relative stability against major trading currencies since 2023. The Finance Minister pointed out that while the cedi experienced some recent pressures, these have since subsided. The depreciation of the cedi against the US dollar improved from 54% in November 2022 to 27.8% in December 2023, compared to 30% in December 2022.

"The year-to-year depreciation of the cedi moderated to 7.7% in the first quarter of 2024, compared to 22.1% in the same period in 2023. The cedi cumulatively depreciated by 18.6% against the US dollar at the end of June 2024, compared to 22% in the same period in 2023," Dr. Amin Adam explained.

As of August 25, 2024, the cedi had depreciated by 21.5% against the US dollar, slightly better than the 22.1% recorded in the same period in 2023. The Finance Minister expressed optimism about the cedi's future performance, noting that the month-on-month depreciation improved significantly from 6.1% in May 2024 to 3.1% in June 2024, and further to 2.1% in July 2024.

"If this trend continues, I can assure you that our cedi will continue to hold against the major currencies," Dr. Amin Adam said.

He attributed the stabilisation of the cedi to several factors, including the Bank of Ghana's monetary policy, strong fiscal consolidation, the Gold for Oil programme, and the Bank of Ghana's gold for reserves programme. Additional measures include the centralised platform for foreign exchange bureaus, the implementation of the dynamic cash reserve ratio to absorb excess liquidity, and revised regulations on advanced payments of imports. Positive market sentiments following the disbursement of the third tranche of the IMF extended credit facility have also played a role in supporting the cedi's stability.