Browsing: Ghana Inflation

The ratings released last week, projected annual average inflation of 22% in 2022, slowing to 16% in 2023. Fitch’s projection is better than Ghana government’s revised projected end year inflation of 28.5% as presented by the Finance Minister, Ken Ofori-Atta, during the presentation of the mid-year review budget to parliament, fortnight ago.

the revision of the end-period inflation for 2022, as part of the re-jigging of the entire macroeconomic framework, has been necessitated by a significantly-changed macroeconomic environment.

The figure means that the Month-on-month inflation between May 2022 and June  2022 stood at 3.0 percent.

The Monetary Policy Committee, (MPC) will from this week begin to review the health of the economy and also announce a new policy rate for the next couple of months. But there strong indication that the BoG would hike the policy rate further in attempt to anchor inflation.

According to the Central Bank agriculture has broader implications on the economy, including price stability, exchange rate stability and generation export revenues from the sector.

They believe the Bank of Ghana’s measures put in place to curb the consistent rise in inflation are either not working or the situation is not being diagnosed properly. Both, are thereby calling on the government through the finance ministry to consider other factors such as the fiscal space.

This has therefore lay bare the inflation targeting regime of the central bank, which it uses to control economy in terms of currency exchange rate and rate of economic growth, to criticisms by some economists as to whether it real works the magic or it is a ‘try your luck’ theory.

The MPC need to decide on the current policy rate, which stands at 17%. The policy rate, which influences interest rates for individuals and businesses, is also used as a tool to curb inflation in the country.

Some economists have predicted that, the MPC bimonthly review of the economy will ‘sweat’ to arrive at policy recommendations that balance its mandate to tame the unprecedented inflation spike, manage liquidity issues, and growing the economy. 

Year on year inflation is expected to worsen further in the coming months in the wake of the decision by the Public Utility Regulation Commission to hike tariffs of electricity and water as well as increase in transport fares by the transport operators in the country.