Ghana’s Inflation Slowed for Second Consecutive Month to 9% in April

By Moses Mozart Dzawu -

Ghana’s inflation slowed for the second consecutive month in April as the impact of a 30 percent increase in gasoline prices in January eased and the cedi stabilized.

The inflation rate fell to 9 percent from 9.1 percent in March, Grace Bediako, a statistician at the Ghana Statistical Service, told reporters today in the capital, Accra.

“I see the gasoline price effects easing further,” Collins Appiah, head of asset management at Accra-based NDK Financial Services Ltd., said by phone on May 9.

The increase in gasoline prices on Jan. 4 by Ghana’s National Petroleum Authority pushed inflation up to 9.1 percent in January from 8.6 percent the month before. Price-growth had slowed in the previous 18 months from a five-year high of 20.7 percent in June 2009.

The recent strength in the cedi has also helped slow inflation. After weakening as much as 5.7 percent against the dollar in the first five weeks of 2011, the currency has stabilized and is now down only 1.5 percent in the year, easing pressure on import costs.

Slowing inflation enabled the central bank to cut its key interest rate by 4.5 percentage points in the 12 months though July 2010, when it reduced the rate to 13.5 percent. The rate was maintained for the third consecutive meeting at 13.5 percent on Feb. 18.

“The central bank will want to maintain the status quo,” Lisa Lewin, head of sub-Saharan Africa analysis at London-based Business Monitor International, said in an e-mailed comment yesterday. “Inflation has been relatively low and stable over the past several months.”

credit: bloomberg.com