End-08 Inflation Uptick

Headline inflation in Ghana rose to 18.1% y-o-y in December, up from 17.4% y-o-y in November and 17.3% y-o-y in October. This took inflation back to August 2008 levels, and extended the uptrend seen since October. Previously, an encouraging downtrend had been witnessed, since inflation peaked at 18.4% y-o-y in June 2008. We believe the end-year uptick can be attributed to election-related fiscal spending, as well as the depreciation of the cedi. In 2009, we forecast inflation trending down to 10.0% by year-end. Global deflation and low oil prices will help to bring the numbers down, but the continued depreciation of the cedi will keep inflation in the double digits, in our view.

To read the full article, please choose one of the following options: