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A quarterly review of events in the economy by stockbroking firm, UMB Stockbrokers, has predicted that inflation will end the fourth quarter ranging between 16 and 17 per cent. The increment will be fuelled by expected upward adjustments in prices of utilities within the period, the firm said in its third quarter analysis released mid-October. The analyses, which were done by Nana Kofi Agyman-Gyamfi, also projected that the local economy would not see "any significant change� from trends observed in recent months. Below are excerpts of the report and the expectations in the last quarter of the year. Economy struggles to recover The domestic economy continued to struggle for stability as it was still in need of structural reforms. The quarter saw recurring energy crises, removal of all subsidies on petroleum products and increase in utility tariffs as well as declining world market prices of gold, which resulted in Ghana�s economy remaining frail. The rippling effect on businesses was a dip in the business confidence index to 78.6 per cent at its last reading in June. This caused the government to revise the 2014 budget to reduce Ghana's vulnerability to shocks from large deficit financing; key macroeconomic indicators were reviewed in line with the domestic economy�s direction. Additionally, the Central Bank reversed its foreign exchange policies introduced earlier in the year while the Monetary Policy Committee of the Bank of Ghana also increased the Policy Rate by 100 bases to 19 per cent. The quarter also saw the managers of the economy engaging with the International Monetary Fund to provide additional balance of payments support. This, according to the Finance Minister, Mr Seth Terkpe, will boost business confidence, attract foreign investments and alleviate the country�s present economic condition. In other developments, the Ministry Of Finance and Economic Planning (MOFEP) released provisional fiscal data, which showed total revenue for the half year amounting to GH�11.14 billion as against a target of GH�12.1 billion. Total expenditure for the six months also amounted to GH�13.5 billion. Stock market The performance of the bourse was bearish in the third quarter compared to the previous quarter. Key indicators underperformed during the period. Concerns about the economic environment and attractive rates on fixed income instruments continued to divert investor attention from the stock market. Selling pressure on equities also persisted during the quarter as profit taking and a desire to cut losses weighed on share prices. Investors on the prowl for bargain deals in blue chip stocks saw great buying opportunities. Resilient earnings results in the first half of the year released by some financial stocks gave a boost to their share prices. Nine equities thus advanced this quarter. Muted risk taking also saw volumes sliding. Value of trades nonetheless improved compared to the previous quarter as block trades in Total Petroleum, Stanchart and Ecobank Ghana increased the turnover. In addition, price gains by Ecobank Transnational, Benso Oil Palm and CAL Bank gave a boost to value. Outlook Assistance from IMF in putting right some of the ills of the domestic economy will soothe the country�s bruised business confidence and restore macroeconomic stability which will boost medium-term outlook. The recent reversal of the BoG�s forex policies, in addition to expected inflows from COCOBOD�s US$1.7 billion facility, and the Eurobond may continue to cushion domestic reserves and boost the local currency in the short term. The continuous uptick of cocoa and demand for gold will also boost the nation�s earnings. The need for foreign currency for imports towards Christmas festivities will however impact negatively on the local currency; albeit with reduced volatility. Short-term rates on the money market will continue to tick higher as liquidity in the economy remains high and the central bank continues to mop up excess funds, alongside the government�s need of funds to meet some key obligations. With respect to inflation, we foresee further climb in price levels from the rippling effects of the upward adjustments of fuel prices and utility tariffs. In the light of the foregoing, inflation is expected to range between 16 per cent and 17 per cent during the fourth quarter. As the government explores alternatives to contain the falling local currency, high interest rates and reduce its expenditure, the economy may see some reprieve before the turn of the year. Stock market outlook Trading activity on the bourse is expected to improve as investors rush for discount deals in undervalued stocks with strong fundamentals ahead of the New Year. The release of the nine-month earnings results and speculator activity are also expected to bring some lustre into the recently lulled market. Manufacturing firms are expected to see challenging times in the months ahead, as increasing utility tariffs and unreliable power supply among others may put pressure on their activities and bottomline. They may, however, receive some reprieve as the Atuabo Gas plant comes on stream from the fourth quarter to help address some of the challenges in the energy sector. In spite of unimpressive financials for Fan Milk, Unilever and Guinness Ghana, there are long-term prospects in these stocks. Therefore, investors can take advantage of the current low share prices. Investors looking to the long term can also take advantage of fundamentally right stocks in the financial sector like Ghana Commercial Bank, CAL Bank, Stanchart and Ecobank Ghana. Total Petroleum, Ghana Oil and Benso Oil Palm are also worth investors pick.