Data released on Wednesday showed that inflation pressures in Ghana continue to build. Headline inflation accelerated to 29.8 percent y/y in June from 27.6 percent in May. The report revealed that inflation pressures are broad-based. That said, the main drivers of inflation were transport, household equipment and maintenance, housing, water, electricity and gas. Oil prices denominated in cedi are more than 80 percent higher on a year-on-year basis. This explains why transport costs are the biggest driver of inflation within the country. With inflation buoyed at these levels, there is a high possibility that the central bank will hike rates further in the coming months. Recall that the Bank of Ghana has already hiked rates by 550bp since November 2021.
