INFLATION: South Africa, Ghana, Tanzania, Rwanda, Ethiopia

LAGOS (Capital Markets in Africa) – Ghana’s inflation rate rose to the highest level in four months in November as the cedi continued to weaken. Annual inflation quickened to 8.2% in from 7.7% in October, Government Statistician Samuel Kobina Annim told reporters in the capital, Accra, on Wednesday. The median estimate of three economists in a Bloomberg survey was 7.6%. Prices rose 0.7% in the month.

Key Insights

• This is the first time since the statistics office started using a new base year for the consumer price index from August that inflation is above the midpoint of the central bank’s target band of 6% to 10%. The agency hasn’t provided revised price-growth data for the months before August, complicating the calculation of longer-term trends.
• The central bank said in November it sees inflation staying inside its target range, barring any unforeseen shocks. The cedi extended losses after the central bank held its key rate at 16% last month, taking its fall against the dollar to 13.7% for the year. That is adding to price pressures.

South Africa Inflation Gets Closer to 9-Year Low as GDP Shrinks
South African inflation slowed in November, getting closer to a nine-year low, as calls increase for the central bank to help support an economy at risk of a recession.

The consumer inflation rate fell to 3.6% compared with 3.7% in October, the Pretoria-based Statistics South Africa said Wednesday in a statement on its website. That matched the median estimate of 14 economists in a Bloomberg survey. Prices rose 0.1% in the month.

Key Insights

• The Reserve Bank is facing pressure to ease policy after the economy unexpectedly contracted in the third quarter and power cuts raised the risk of a second recession in as many years. Still, its modeling shows a 25 basis-point cut point will only increase economic growth by 0.1 percentage point a year later.
• Inflation has now been at or below the 4.5% midpoint of the central bank’s target range for 12 straight months. The Monetary Policy Committee wants to anchor price-growth expectations at the midpoint, but said in November it sees the rate going up to an average of 5.3% in the first quarter of 2020. Its forecasting model suggests room for one 25-basis point reduction in the key rate in the three months to September next year.
• Annual core inflation, which excludes the prices of food, non-alcoholic drinks, fuel and electricity, slowed to 3.9%, the lowest level in eight years.

Rwanda’s Annual Urban Inflation Rate Rose to 6.9% in November
Rwanda’s annual urban inflation accelerated from 4.4% in October, the National Institute of Statistics says in a report on its website.

• Prices rose 1.9% m/m
• Inflation rate excluding food and energy prices rose by 3.4% from a year earlier

Tanzania’s Annual Inflation Rate Rises to 3.8% in November
Consumer-price inflation accelerated from 3.6% in October, according to the statistics agency.

• Prices rose 0.5% m/m
• Core inflation, which excludes food and fuel prices, slows to 2.2%

Ethiopian Inflation Quicken in Five Year on Food Price
Increasing prices of food, including cereals like the staple teff, pushed Ethiopia’s annual inflation rate to 20.8% in November — the highest level in more than five years. The Horn of Africa nation spends as much as $700 million a year on grain imports to fill food shortages. That’s putting a strain on foreign-exchange supplies already limited by large current-account deficits and debt.

Sudan Inflation Accelerates to 60.7% in Nov. vs 57.7% in Oct.
Pickup caused by increasing food prices in both urban and rural areas, Sudan’s Central Bureau of Statistics says in a statement.

Mozambique November Consumer Prices Rise 2.6% y/y
Consumer price inflation accelerated from 2.3% in October, Mozambique’s statistics agency says in a statement posted to its website.

• Prices rose 0.6% m/m, from 0.3% in October
• Prices in Maputo, the capital, rose 1% y/y, 0.2% m/m in November
• NOTE: Central bank scheduled to announce monetary policy rate decision Dec. 12