June 15 (Bloomberg) -- Ghana’s inflation slowed for the third consecutive month in May as the effects of an increase in fuel prices at the beginning of the year eased.
The inflation rate fell to 8.9 percent from 9 percent in April, Grace Bediako, a statistician at the Ghana Statistical Service, told reporters today in the capital, Accra.
“Following the January fuel price increase, the secondary effect of that increase was fairly limited,” Razia Khan, London-based head of Africa Research at Standard Chartered Bank Plc, said in an e-mailed note yesterday.
A 30 percent increase in gasoline prices on Jan. 4 by Ghana’s National Petroleum Authority pushed the inflation rate to 9.2 percent in February from 9.1 percent in January and 8.6 percent in December. The rate had fallen in the previous 18 months from a five-year high of 20.7 percent in June 2009.
“A stable cedi, benign food inflation and moderating energy price pressures” are all easing pressure on inflation, Yvonne Mhango, a Johannesburg-based economist at Renaissance Capital, said in an e-mailed comment yesterday.
After weakening as much as 5.7 percent against the dollar in the first five weeks of 2011, Ghana’s cedi has stabilized and is now down 2 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 through July 2010. After keeping it unchanged for three consecutive meetings, the central bank cut the rate for the first time in 10 months to 13 percent on May 13.
“The extent of improvement in the inflation figure will set everyone thinking about whether the Bank of Ghana might even ease interest rates again,” Khan said. “We obviously don’t think they will.”
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