Inflation could fall for the fourth consecutive time in April 2023, extending the disinflation process since 2023 began.

According to GCB Capital, it expects another significant drop in the Consumer Price Inflation in April 2023, extending the disinflation process through four months of 2023.

The April 2023 inflation data window saw a sharp correction of the cedi, easing petroleum prices at the pumps and easing price pressures across both the food and non-food baskets. The Ghana Statistical Service is expected to release the April 2023 inflation figures later today May 10, 2023.

“We expect these favourable price effects and the favourable base pull to trigger another sharp drop in headline inflation to around the 36% level, all things equal, with the deflation trend for the month-on-month headline, food, and non-food inflation also set to continue in April 2023”.

“While the numbers for core inflation for Apr-2023 are not yet published, we expect core inflation to be easing alongside the headline number as the pass-through effects of the volatile items in the inflation basket wane”, it added.

Despite the above, GCB Capital said the price effects of the new revenue measures that took effect on May 1, 2023, could stoke some inflationary pressures as pricing agents adjust general price levels to reflect the new and revised taxes.

However, it expects the favourable base pull and the easing price pressures from the volatile items to moderate the impact of the new revenue measures and sustain the disinflationary trend.

Therefore, the Monetary Policy Committee could hold the policy rate at 29.5% at its next meeting later in May 2023, following the improving inflation outlook, adding, it expect this declining trend in inflation to exert some downward pressure on nominal money market yields once the International Monetary Fund deal is secured.