Inflation to dip to 24.6% in April 2024 – IC Securities

According to IC Securities, inflation is projected to decrease to 24.6% year-on-year in April 2024, down from 25.8% recorded in March 2024. However, month-on-month inflation is anticipated to rise to 1.4%.

The firm has also revised its end-of-year inflation forecast to 16.9% plus or minus 1.0 percentage points, compared to its previous estimate of 16.1% plus or minus 1.0 percentage

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IC Securities attributes the expected increase in annual inflation to the 10.6% year-to-date depreciation of the Cedi. This depreciation is anticipated to impact inflation through higher transport fares, utility tariffs, and the prices of imported goods.

The March 2024 Consumer Price Index (CPI) data indicated a notable increase in transport inflation's contribution to headline inflation, rising from the 11th to the 8th position in terms of influence.

Despite the potential upward pressure on inflation, IC Securities views the spike in March 2024 as largely anticipated due to unfavorable base effects. The firm maintains its expectation of a generally nonlinear disinflation trajectory for 2024, considering the March 2024 upsurge as a temporary deviation in the disinflation trend.