IC Research Report predicts second consecutive monthly inflation rise to 23.9%

According to a report by IC Research, February 2024 is poised to witness a second consecutive monthly inflation increase, with projections indicating a 40-basis-point climb to 23.9%.

The forecast attributes this upward pressure to recent tax implementations, including the emissions levy affecting industrial and transport sectors, along with heightened excise duty on cider beer and imported plastic packaging.

IC

Read full articleResearch anticipates year-on-year and month-on-month inflation rates of 23.9% and 2.2%, respectively, for February 2024. This could potentially lead to a reduction in the real policy rate, keeping the March 2024 Monetary Policy Committee (MPC) rate decision steady at 29.0%.

The unexpected uptick in January 2024 headline inflation, surpassing analyst predictions with a 30-basis-point rise to 23.5% year-on-year, has created uncertainty over market optimism, deviating from expectations of continued disinflation.

Renewed price pressures, particularly in non-food inflation with a 180-basis-point increase to 20.5% year-on-year, offsetting a 160-basis-point decline in food inflation to 27.1% year-on-year, contributed to the overall inflationary trend.

Despite stable energy prices and the strong performance of the Ghanaian Cedi at the start of the year, the unforeseen inflationary upturn underscores the impact of new taxes introduced in the 2024 budget and expected pass-through effects of recent foreign exchange pressures on the economy.