Inflation Begins Second Quarter at 25.0%

Inflation extended its choppy performance as it began the second quarter of the year dipping from a four-month high as the ongoing hikes in the prices of food stuff coupled with the Cedi’s struggles had a minimal impact on the year-on-year inflation reading. The rate of inflation fell from 25.8% in March to print at 25.0% in April fueled by declines in the readings for local and imported items.

The month-on-month inflation reading, however, supported the prevailing price movements as the inflation reading jumped up by 100 basis points from 0.8% in March to print at 1.8% in April with over 26 out of the observed 27 items recording an increase over the past month. This has come on the back of the recent upward adjustments in the prices of petroleum products at the pump and as prices of staples continue to see increases following delayed harvests and disappointing rainfall patterns.

Food inflation resumed its downward trend in April after recording an uptick in March with the inflation reading for the food category easing down from 29.6% in the previous month to print at 26.8% in April. Cocoa drink came in as the biggest price driver at 63.4% and was closely followed by Tea & related products at 59.3%. The month-on-month reading for the food category climbed up from 1.0% in March to 2.1% in April, its highest in nine months.

The non-food inflation category similarly saw an increase in its annual reading as it moved up from 22.6% in March to 23.5% in April, the highest since October 2023. Six out of the twelve sub-items led by Alcoholic beverages & narcotics with 39.3% inflation rate recorded numbers above the group’s average inflation mark. The month-on-month inflation rate rose from 0.7% in March to print at 1.5% in April with Housing & utilities posting the highest inflation print at 3.0%.

Across the regions, the inflation rate ranged from 11.3% in the Oti region to 42.5% in the Upper East region. Inflation on local and imported goods recorded a decline to 25.7% and 23.5%, having risen in March to print at 26.6% and 23.8% respectively.

The next Monetary Policy Committee (MPC) sitting of the central bank is due later in the month where it is expected that the MPC will remain glued to its cautious stance as the inflationary path remains uncertain.