GCB Capital has predicted that inflation in Ghana could rise further in February and March 2024, reaching within the 26.0% bracket.

This projection follows a marginal increase in year-on-year inflation to 23.5% in January 2024, up from 23.2% in December 2023, primarily due to unfavorable base drift.

The report from GCB Capital suggests that inflation will return to a path of disinflation from April 2024, with an expectation of headline inflation falling below 20.0% from May 2024.

The end-of-year outlook for 2024 is pegged at 16.5% ±1%, assuming all other factors remain constant.

Despite the positive outlook, GCB Capital acknowledges potential risks to inflation, including cedi depreciation and its potential pass-through effects.

The report also highlights the risk of unrestrained expenditure in the lead-up to the 2024 elections, which could reignite demand-driven price pressures around the peak of the political season.

The ongoing IMF program is noted as providing a foreign exchange liquidity cushion, but uncertainties remain concerning its long-term impact on inflation.