International research institution and market information firm, Fitch Solutions, has reiterated a disinflationary process for Ghana in 2023, forecasting an average inflation of 33.4%.

According to its latest assessment of the Ghanaian economy, inflation will only decline gradually in 2023 as tax hikes – including an increase in the Value-Added Tax to 15.0% – will exert upward pressure on consumer prices.

The projection means inflation will still remain high this, but lower than last 2022’s average.

“A decline in real incomes will weaken consumer activity in 2023. We anticipate a disinflationary trend in 2023 – with price growth averaging 33.4%.

Fitch Solutions had earlier predicted an average inflation of about 18.7% in 2023. Inflation however ended 2022 at 54.1%.

It continued that other fiscal consolidation measures, such as the introduction of an income tax bracket of 35.0% will further squeeze household finances in 2023.

It forecast private consumption growth to also slow to 2.4% in 2023, from an estimated 2.8% in 2022.

Inflation ended 2022 at record 54.1%

Ghana’s inflation ended 2022 at 54.1%, data from the Ghana Statistical Service (GSS) has revealed.

Despite a strong improvement in the value of the cedi and a reduction in the prices of petroleum products, the rate of inflation still went up in December 2022. This was due to steep increases in food, transport and housing costs.