Disinflationary Path Extends Into Second Quarter

In line with expectations of slowing down inflation numbers, the Consumer Price Index recorded its fourth consecutive decline as price stability gains a footing after a turbulent period last year. Accordingly, the inflation rate began the second quarter of the year at a six-month low, printing at 41.2% in April, down from 45.0% in March. 2023 inflation numbers continue to see a persistent drop following a drastic drop in the prices of petroleum products amidst a relatively stable currency.

Despite the drop in the annual inflation rate, the month-on-month inflation rate rose from a record low of -1.2% in March to 2.4% in April, signaling the prevalence of upward price pressures on consumer goods. Inflation between March and April saw an increase as prices on foodstuffs continue to remain high ahead of the harvest season. The inflation rate is expected to see further weakening in the short-term as Ghana inches closer to securing an IMF bailout programme.

The annual food inflation recorded a marginal dip in April compared to an 830 basis points decrease in March. It slowed down from 50.8% in March to print at 48.7%. Month-on-month food inflation saw a significant jump from -0.9% in March to 4.3% in April with most of the sub-group items recording major increases led by Tea & other plant products at 10.3% (m-o-m).

Inflation among non-food items remained relatively stable with the group’s annual inflation rate coming in at 35.4% in April from 40.6% in March. Month-on-month non-food inflation saw a relatively minimal increase from -1.5% in March to 0.7% in April. A 1.1% contraction in the inflation rate for the Transport sub-group contributed to the group’s disinflation.

Across the regions, the inflation rate ranged between 28.0% in the Volta region and 64.0% in the Western North region. Inflation on both local and imported items saw their fourth decline in a row as they both printed at 38.2% and 43.1% in April from 41.9% and 51.6% in March respectively.

As calls grow for lending rates to be lowered, the central bank’s Monetary Policy Committee will be expected to set the ball rolling, and may reverse its monetary policy tightening with the first policy ease in nearly two years when the Committee meets later on in the month.