The Economist Intelligence Unit (EIU) predicts that despite a slowdown in monthly inflation over most of the period, inflation will average 38.1% by the end of the year.
This is due to upward domestic price pressures, including the introduction of new taxes such as the Value Added Tax (VAT) rate and excise duties, as well as the pass-through effects of sustained depreciation.
While inflation declined to 45% in March 2023 from 52.8% in February 2023, it remains high and may not result in lower lending rates.
The deflation of items in the Food and Non-Alcoholic Beverages group and Non-food inflation led to the significant drop in March 2023 inflation, but inflation is expected to rise further in 2023.
However, the EIU predicts that inflation will average 10.9% per year between 2024 and 2027, falling within the lower half of the Bank of Ghana’s target range of 6-10% by 2027 due to waning supply-side price pressures as global commodity prices decline.