Inflation rises to 18.4 pct

Ghana's inflation rose to 18.4 percent in June from 16.9 percent in May, data showed on Friday, reflecting mounting costs of services, transport and food in the West African cocoa and gold producer.

The Ghana Statistical Service (GSS) said there was a risk of further increases unless the global outlook improved.

Non-food items including transport contributed 10.4 percentage points to the June rate, while food items contributed eight percent, said Grace Bediako, a government statistician.

Ghana's inflation rate has climbed steadily since October despite the Bank of Ghana's decision in April to raise its prime interest rate by a bigger-than-expected 175 basis points to 16 percent.

The West African country is the world's second largest cocoa producer and the continent's third largest gold miner. It has significant oil reserves which are due to come on line in 2010.

Unveiling a financial package in May to ease the impact on consumers of food and fuel price hikes, President John Kufuor revealed that the country's oil import bill had leapt from $500 million 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 6.3 percent growth target for 2008 was still on track, business confidence had slackened in the first quarter.

But an original target of nearly halving inflation to 8 percent by the end of the year now appeared well out of reach.

Last month, Finance Minister Kwadwo Baah-Wiredu said he believed improvements in agriculture, construction and the services sector would help to alleviate the negative impact on the economy of high oil prices.