BoG optimistic about single-digit inflation

The Bank of Ghana expects consumer inflation to ease to 9.5 per cent, plus or minus two percentage points, by the second half of next year.

This is possible with the continued tight monetary policy stance and renewed government stabilisation efforts, aided by foreign exchange liquidity boost, the Governor, Mr Henry Kofi Wampah, has said.

“The single digit target of 9.5 per cent remains the target we are working towards and we believe we will recover to that level by the second half of 2015,” Dr Wampah told Reuters.

Consumer inflation rose to 15.6 per cent in June 2014 mainly due to soaring prices of imported non-food goods, according to the Ghana Statistical Service. 

In a supplementary budget to Parliament in July, the government’s end of year inflation was revised to 13 per cent, plus or minus two per cent, up from the central bank’s target of 9.5 per cent.

Dr Wampah said the revised figure was the central path of the bank’s forecast for the year. “But our original target of a single digit still remains and we expect to achieve that by the second half of next year,” he added.

The Bank of Ghana Monetary Policy Committee on September 17, 2014, maintained its benchmark interest rate at 19 per cent.

Ghana started talks on September 9 with the International Monetary Fund for an assistance programme to help fix its fiscal imbalances, which include a high budget deficit, rising inflation and a currency that has fallen sharply this year.

The country has recorded consistently high economic growth rates in recent years on the back of its exports of gold, oil and cocoa.