Ratings agency, Fitch, expects inflation to peak in the 3rd quarter of 2022 before slowing through the end of the year.

“We forecast annual average inflation of 22% in 2022, slowing to 16% in 2023”.

The Bank of Ghana’s Monetary Policy Committee (MPC) has raised the main policy rate twice in 2022, by a total of 450 basis points to 19%.

Fitch believes that the Central Bank would raise the policy rate again if inflation does not peak in line with current expectations.

“A higher policy rate would likely be transmitted to domestic yields, putting further pressure on the government's domestic borrowing costs”, it added.

Inflation rose in July 2022, the highest since late 2003.

However, the rate of inflation slowed down in the month under review, as inflation went up by 1.9% over that of June 2022 (29.8%).

According to the GSS, the increase in inflation was once again caused by Transport (44.6%); Housing, Water, Electricity, Gas and Other Fuels (43.0%); Furnishings, Household Equipment and Routine Household Maintenance (42.0%); Recreation, Sport and Culture (33.8%); Personal Care, Social Protection and Miscellaneous Goods and Services (33.7%) and Food and Non-Alcoholic Beverages (32.3%).

Indeed, six divisions recorded inflation rates higher than the national average.