Inflation is expected to fall to 21% level in May 2024 and end the year around 17%.
According to GCB Capital, this is due to base effects.
However, it expressed concern about the anticipated pass-through of the current spate of cedi depreciation and its lagged impact, adding, “The second-round effects remain an upside risk to the near-term outlook”.
“We have also seen the multiple upward adjustments in ex-pump petroleum prices, which result in transport fare hikes, and its full pass-through to general prices is yet to come. With the quarterly utility tariff adjustment still to come amidst the general macroeconomic uncertainties, the risk of near-term inflation is quite pronounced, requiring a continuously tight monetary policy stance to anchor inflation expectations and the disinflation process”.
Inflation tumbled in April 2024 to 25.0% from 25.8% in March 2024.
In response, the Monetary Policy Committee (MPC) maintained an appropriately tight monetary policy stance amidst the emerging upside risks to inflation from currency pressures, recent transport fare hikes, and their potential lagged impact on inflation.
The Committee indicated that its latest forecasts show a slightly elevated inflation profile, attributed to the recent spate of cedi depreciation and transport fare hikes.
However, it expects the disinflation process to continue broadly, projecting headline inflation to end in 2024 within the monetary policy consultative clause of 13% to 17%, which is contingent on sustaining the tight monetary policy stance, including aggressive liquidity management operations.
GCB Capital concluded that “The decision is consistent with our expectations and the consensus market view as the upside risks to inflation are evident”.
Latest Stories
-
Prof Sharif Khalid defends gov’t’s record on health workers, questions comparisons with UK
4 minutes -
Razak Opoku: KGL-NLA contract the best since establishment of NLA in 1958
32 minutes -
Daily insight for CEOs: Customer-centric innovation – Designing for relevance and growth
46 minutes -
36 Prison inmates write BECE, 2 candidates die, 16 more invigilators arrested
2 hours -
GII boss commends AG’s anti-corruption approach
2 hours -
Customs Commissioner hails GRA’s support services division as ‘Unsung Engine Room’ at strategic retreat
2 hours -
Good gov’t can have bad nuts – Agyapa Mercer backs NSA probe, calls for accountability
2 hours -
Let’s not entangle AG’s ORAL probe in politics – Dr Yankson
3 hours -
GRA’s support services sivision champions strategic transformation at 2025 management retreat in Ho
3 hours -
GES extends school selection deadline to June 25 amid Private SHS inclusion
3 hours -
7 Lawra SHS students missing, feared dead after boat capsizes on Black Volta
3 hours -
Gov’t dismissive and insensitive over nurses’ plight – Agyapa-Mercer
3 hours -
NSA still using fraud-prone system after GH¢548m scandal – MFWA raises alarm
3 hours -
Stop forcing workers to strike before honoring agreements – Justice Yankson urges gov’t
4 hours -
We may resume strike if gov’t doesn’t honour its part of the bargain – GRNMA
4 hours