Ghana\'s inflation rises to 18.4 pct in June

Tag : west african
Ghana's inflation rose to 18.4 percent in Junefrom 16.9 percent in May, data showed on Friday, reflectingmounting costs of services, transport and food in the West Africancocoa and gold producer.
The Ghana Statistical Service (GSS) said there was a risk offurther increases unless the global outlook improved.
Non-food items including transport contributed 10.4 percentagepoints to the June rate, while food items contributed eightpercent, said Grace Bediako, a government statistician.
"The acceleration in Ghana's CPI ... is steep and a reminder of thevery real pressures that lie ahead, especially in light of therecent pressure on food and fuel," said Razia Khan, Africaeconomist at the Standard Chartered Bank.
Ghana's inflation rate has climbed steadily since October despitethe Bank of Ghana's decision in April to raise its prime interestrate by a bigger-than-expected 175 basis points to 16 percent.
"The authorities will need to take action to prevent furtherdeterioration. It now looks as though the Bank of Ghana will haveto raise interest rates by at least 150 bps at their meeting thismonth," Khan said in comments emailed to Reuters.
Ghana is the world's second-largest cocoa producer and thecontinent's third largest gold miner. It has significant oilreserves which are due to come on line in 2010.
Unveiling a financial package in May to ease the impact onconsumers of food and fuel price hikes, President John Kufuorrevealed that the country's oil import bill had leapt from $500million in 2005 to $2.1 billion at the end of last year.
He said it was moving towards $2.5 billion.
Ghana's central bank governor has said that although the 6.3percent growth target for 2008 was still on track, businessconfidence had slackened in the first quarter.
But an original target of nearly halving inflation to 8 percent bythe end of the year now appeared well out of reach.
Last month, Finance Minister Kwadwo Baah-Wiredu said he believedimprovements in agriculture, construction and the services sectorwould help to alleviate the negative impact on the economy of highoil prices.