- IC Securities predicted a surge in Ghana's inflation rate
- Month-on-month inflation is expected to ease
- IC Securities remains cautious about the outlook
Investment firm IC Securities has predicted a surge in Ghana’s inflation rate to 21.8% in August 2024, primarily due to favorable base effects.
While month-on-month inflation is expected to ease, the firm warns against overly optimistic inflation and interest rate outlook.
In their analysis, IC Securities pointed out that an unexpected CPI contraction in August 2023 led to a significant decline in annual inflation.
Given the unusual nature of this contraction, they anticipate a modest increase in the CPI level for August 2024, tempered by the food harvest.
Despite the recent decline in inflation to 20.9% in July, IC Securities remains cautious about the outlook, citing potential upside risks from factors like utility tariff hikes and election-related spending.
However, the firm believes that the widening real interest rate could pave the way for interest rate cuts, although the Monetary Policy Committee will need to balance this with the International Monetary Fund’s targets and the government’s borrowing needs.
