Inflation outlook to remain negative, says economic analysts
Economic analysts with SIC Limited, are projecting a negative outlook for the country’s headline inflation given its upward trajectory.
According to Godwin Odoom and Obed Sackey, Ghana’s inflation rate is expected to continue to rise in the coming months given the anticipated spikes in the prices of crude oil on the back of the Russia-Ukraine war.
The ongoing war, they further assert, will have adverse impact on the growth of the Ghanaian economy.
“Our outlook for inflation remains negative. We expect Russia-Ukraine conflict to have adverse effect on both economic growth as well as inflation. The spike in oil prices as the conflict continue to soar is expected to drive overall inflation higher in coming months,” they stated.
Adding that, the projected further rise in inflation rate will be worsened by the depreciation of the cedi against its anchor currency, the US dollar and the British pounds
“We also expect the inflation rate to rise for imported goods and local goods to edge higher in March as the Ghana Cedi is projected to depreciate further against the US Dollar and British Pounds,” they added.
Year-on-Year inflation rate as measured by Consumer Price Index [CPI] was 15.7% in February 2022, a rise compared to the 13.9% recorded in January 2022, representing a Month-on-Month inflation increase of 2.4%. The current rate is the highest since 2016.
Food inflation for the Month of February settled at 17.4% which is higher than January’s food inflation of 13.7%. Food inflation’s contribution to total inflation increased from 44.2% last month to 49.4% in February 2022. Overall Month-on-Month food inflation was 3.2%.
Non-food Year-on-Year inflation on average went up again in February 2022 compared to January 2022 (from 11.6% to 12.5%).
Greater Accra Region recorded the highest overall inflation of 19.5% whilst Western Region recorded the lowest inflation rate of 11.6% at the regional level.
Eastern Region recorded the highest Month-on-Month inflation of 7.3%. All regions recorded positive Month-on-Month inflation rates with Upper East region recording the lowest of -0.9%.
Inflation rate at the end of the second month of the year stayed well above the higher band of Bank of Ghana’s year end target of between 6% and 10%.
Peruse details of report below:
Inflation Report_february 2022 by Fuaad Dodoo on Scribd
