GhanaInflationInsightsMacroeconomic update

11 May 2023

Ghana’s April 2023 Inflation: 11 May 2023 Cut The Mustard

In brief

  • The downshift in Ghana’s headline inflation continued in line with our expectations for the April 2023 outturn, falling 380bps to 41.2% y/y in the month under review (IC Insights: 41.3% | Market Consensus: 39.8%).
  • Similar to the previous month, the fall in headline inflation for April 2023 was supported by declines in both food and non-food inflation rates. Despite the decline in food inflation, we observed a relative flattening of the food inflation curve compared to the previous three months as inflation for other food items ticked higher
  • We believe the lower fuel prices in April 2023 reflected the lagged impact of the Cedi’s appreciation in March 2023 and provided a slippery slope for non-food inflation over the past 2-months.
  • Our outlook on inflation remains unchanged with the ongoing disinflation expected to persist until year-end (FY2023: 23.7% ± 100bps). Taken together, we believe the favourable exchange rate outlook and the subdued energy prices on the global market will combine to sustain the disinflation until FY2023.
  • However, the near-term outlook appears slightly dampened by the elevated price expectations from the new taxes and the seasonality in prices of some food items. The food price seasonality and new taxes could slow the pace of disinflation over the next 3-months.

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