According to GCB Capital, inflation is poised to resume its downward trend in April 2024 following a notable increase in March, marking the highest level in four months.
The research arm of the investment bank projects a 1.0% decrease in headline inflation for April 2024, although it is anticipated to remain above the February 2024 figure.
While GCB Capital expects favorable base effects, it also highlights fiscal risks and potential speculative foreign exchange pressures as factors that could moderate the pace of disinflation in the second quarter of 2024. Despite these risks, a sharp decline in food inflation is expected to be the primary driver of the anticipated decrease in headline inflation for April 2024.
In March 2024, year-on-year inflation surged to 25.8%, representing a significant increase of about 2600 basis points. GCB Capital views this increase as temporary, but underscores persistent upside risks to the near-term inflation outlook, particularly driven by petroleum price pressures and potential adjustments to transport fares.
With Brent crude oil possibly heading towards $100 per barrel, GCB Capital highlights the potential impact on ex-pump petroleum prices and subsequent second-round effects on inflation.
Additionally, the limited foreign exchange supplies and recent depreciation of the currency are expected to further influence inflation in the coming months.
Source: www.ghanaweb.live