Inflation could climb higher in February 2024 and March 2024 to 26.0% , according to GCB Capital.

This follows a marginal increase in year-on-year inflation to 23.5% in January 2024 from 23.2% in December 2023.

The 0.03 percentage points increase in inflation was largely on account of unfavorable base drift.

According to GCB Capital, inflation will return to the path of disinflation from April 2024, all things being equal.

It therefore expects headline inflation to be under 20.0% from May 2024.  

“We expect headline inflation to print sub-20% from May 2024”.

“We therefore peg our end 2024 outlook at 16.5% ±1%, all things being equal”, it added.

"We note risks to inflation from the simmering cedi depreciation despite the FX (foreign exchange) liquidity cushion from disbursements under the ongoing IMF [International Monetary Fund] programme and its potential pass-through and second-round effects on inflation in the coming months", it mentioned.

It reiterated the risks to inflation from any unrestrained expenditure in the run-up to 2024, which could reignite demand-driven price pressures around the peak of the political season.

Inflation reversed disinflation process

After five consecutive months of decline since August 2023, Ghana’s headline inflation unexpectedly reversed the trend, increasing by 30 basis points to 23.5% in January 2024.

While year-on-year food inflation continued to decline for the sixth consecutive month in January 2024, non-food inflation reversed the course, increasing by 180 basis points to 20.50% in January 2024 and underscoring the increase in headline inflation.

The month-month inflation trend remained undulating, with headline, food and non-food inflation increasing marginally to 2% (+80 basis points), 1.6% (+30 basis points) and 2.4% (140 basis points), respectively. This reflected the simmering price pressures.

Eleven out of twelve divisions of the non-food inflation basket recorded higher rates of inflation year-on-year in January 2024, dominated by education (+5%), health (+3.6%), housing (+3.1%), and transport (+1.2%) divisions.

On a month-on-month basis, twelve (12) out of the thirteen (13) divisions recorded higher inflation, with the transport division switching from a deflation of 0.1% in Dec-2023 to an inflation of 0.5%.