Projection of Increase in Ghana’s Inflation Rate, February 2024 – Research Analysis

According to market research conducted internally, inflation in Ghana is projected to experience a surge in February 2024. This forecast, which is based on recent trends in pricing, will be confirmed with the release of Consumer Price Index (CPI) data scheduled by the Ghana Statistical Services (GSS) for February 2024.

The Changing Trajectory of the CPI

Our sources suggest that the expected increase in the CPI might be driven by an unfavorable base drift, and a 30-basis-point upsurge in the CPI as of January 2024 which reached 23.5 percent year-on-year. This shift, which was mainly due to the non-food component, indicates a change from the disinflation trend observed in the prior six months.

Changes in the Producer Price Index (PPI)

In addition to the CPI, the Producer Price Index (PPI) also witnessed an upward trend. The PPI reached 17.4 percent in January 2024, a rise attributed to increased industrial input costs.

Inflation Rate Predictions by Financial Analysts

Analytical reviews from our sources, include professionals from our staples, Apakan Securities and GCB Capital, who predict that the inflation rate might peak between 25 and 26 percent by March 2024. This anticipation is attributed to base effects and currency pressures. However, they forecast a return to disinflation from April 2024 onwards.

Factors Influencing the Prediction

A few factors contribute to this projection. A number of elements come into play, including an expected US$300 million support from the World Bank aimed at stabilizing the exchange rate. Moreover, recent fluctuations such as a 4.6 percent increase in fuel prices leading to a 30 percent surge in transportation fares also play a part.

Challenges to be Faced

Some difficulty is anticipated in the face of these forecasts. Delays in the negotiation of Eurobond agreements and ongoing power cut issues also pose a challenge for the health of Ghana’s inflation rate.

A Glimpse into the Future

All these factors combined, only the release of the official CPI data for February 2024 from the GSS, will either confirm or alter the current inflation trajectory anticipated by our market analysts. The continuity in the trend of inflation or disinflation, will inherently depend on how these influencing factors evolve over time.