Ghana’s disinflation trend is expected to continue, albeit at a slower pace, despite the depreciation of the cedi and anticipated petroleum price hikes, according to GCB Capital.
The near-term inflation profile appears elevated due to cedi depreciation, transport fare hikes, and utility tariff adjustments, which will moderate disinflation in the second half of the year.
However, favourable base drift will drive continuous disinflation, sustaining the decline in year-on-year inflation. The main crop harvest season is expected to boost disinflation, while the cease-fire talks between Israel and Hamas and the US Fed’s stance on interest rates will improve crude oil supply outlook.
Ghana’s Consumer Price Inflation reached a 26-month low of 23.1% in May 2024, with a base-induced decline in overall and food CPI year-on-year. Despite a slower pace than expected, the decline is expected to continue, driven by favourable base drift and improved foreign exchange reserves.
