July 13 (Bloomberg) -- Ghana’s inflation slowed for the fourth consecutive month in June as the effects of an increase in fuel prices at the beginning of the year eased and the cedi stabilized.
The inflation rate fell to 8.6 percent from 8.9 percent in May, Grace Bediako, a statistician at the Ghana Statistical Service, told reporters in the capital, Accra, today.
“Our expectation is for inflation to continue its downward trend, through into the third quarter,” Collins Appiah, head of asset management at Accra-based NDK Financial Services Ltd., said yesterday. “We do not see any major source of price changes that could reverse the trend, such as fuel price increases, significant spending pressure from the government or a volatile currency.”
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. Price-growth had slowed in the previous 18 months from a five-year high of 20.7 percent in June 2009.
“We see inflation declining again, in June, moving close to 8.1 percent,” Sampson Akligoh, an economist at Accra-based Databank Financial Services, said yesterday. “The currency remains stable, while excessive fiscal pressure seems subdued.”
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 only 2.2 percent down in the year, easing pressure on import costs.
Slowing inflation enabled the central bank to cut its key interest rate by 5 percentage points in the 12 months through July 2010. It resumed the rate cuts on May 13 and again on July 6, cutting the key rate to 12.5 percent.
“For now we think interest rates remain on hold until we get a clearer picture for July and August inflation,” Akligoh said.
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