Consumer Inflation Eases to 12.2%

The Consumer Price Index (CPI) which measures consumer inflation ended September at 201.3 points, compared with 179.5 points in September 2016. This translated into year-on-year (y/y) inflation of 12.2%, down by 10bps from 12.3% in August 2017.

The marginal decline in inflation in September was on the back of a decline in non-food inflation which recorded y/y inflation of 14.1%, compared with y/y inflation of 14.7% in August 2017. The food and non-alcoholic subgroup on the other hand recorded y/y inflation of 8.1% in September 2017, compared with 7.4% in August 2017.

On the regional front, the Volta region recorded the lowest y/y inflation of 10.5% whilst the Upper West region recorded the highest y/y inflation of 13.1%. Only 3 regions recorded inflation rates lower than the national average of 12.2%. The remaining 7 regions recorded inflation rates higher than the national average.

Based on the outlook of economic activity for the fourth quarter of the year, we do not expect any significant threat to inflation for the remainder of the year. Our projection is based on the following factors:

• Increased export revenues resulting from increased commodity output will mitigate any pressure that increased import volumes resulting from the Christmas activities on the Cedi.
• Inflows from the COCOBOD syndicated loan and foreign proceeds from the proposed Energy Bond will also serve as buffer for the local currency.