In brief
- Annual headline inflation came in above our expectation for October 2024 at 22.1% (vs our projected uptick to 21.6% y/y) with upsurges across both food (22.8%) and non-food (21.5%). The latest print represents the second consecutive month of increase in the annual rate, nudging to a 4-month high and underscoring the near-term price uncertainty.
- The announced official CPI levels for October 2023 (195.2pts) and October 2024 (237.8pts) suggested a y/y inflation rate of 21.8%, seemingly below the 22.1% print. However, we probed further and found from the authorities that the October 2023 CPI level should be 194.8pts (instead of the 195.2pts), confirming the 22.1% annual inflation print. The Statistical Service assured of ongoing automation of its processes which will eliminate future discrepancy and has already shortened the publication lag for Ghana CPI data by one week.
- We foresee a slight decline in annual inflation for November 2024 on cooling prices of agrarian produce and muted utility inflation. We however expect the pass-through from recent FX pressures to limit the downside scope, restraining the forecast decline in headline inflation to 21.5% y/y in November 2024 while the m/m rate ticks higher to 1.3%.
- The heightened inflation jitters will stay the policy rate at the final MPC meeting for 2024. Following the 200bps cut in the policy rate to 27.0% at the September 2024 MPC meeting, the two consecutive inflation readings have printed higher, dragging the ex-post real policy rate to a likely neutral zone (at 4.9%) than the required restrictive territory. Our year-end inflation forecast remains at 19.3% – 21.3% with the outlook tilted to the upper-end of the forecast, potentially staying the policy rate at 27.0% with a hawkish tone at the November MPC meeting.
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