Inflation falls again as cedi gains

The cedi suffered from such pressures in the first half of the year, causing it to shed about 15 per cent of its value to the US dollar at the time.

“The depreciation of the cedi was, however, stemmed after the government took decisive policy actions to respond to the build-up of pressures in the foreign exchange market,” the statement which was signed by the media liaison of the MoFEP, added.

Touching on the 0.2 per centage points drop in inflation in October, the statement said “the October 2012 inflation rate of 9.2 per cent announced  by the Ghana Statistical Service (GSS) marks 29 consecutive months of single digit inflation rate in the country.”

“This is in clear contrast to our critics who believe that inflation is likely to return to double-digit zone this year,” the statement added. It said compared with the end-year inflation of 18.1 per cent recorded in December 2008, “the single digit inflation achieved in 29 consecutive months is indeed an unprecedented achievement.”

Inflation which measures the average change in the prices of goods and services in the country has been hovering around nine and eight per cent since June 2010, owing to what government has often referred to as “prudent management of the economy.”

“With the current levels of interest rates, the crop harvest season coming on stream and the cedi appreciating, the inflation rate is expected to continue to remain in a single digit for the remaining period of the year,” the statement added.

It assured that the country’s economic fundamentals remained very strong as the government remained committed to prudent economic management.

According to the statement, “improved macroeconomic policies, underpinned by prudent fiscal management and tight monetary policy has contributed immensely to the decline in both the fiscal deficit and inflation since 2008, while the strong build-up of gross foreign reserves has generally supported the stability of the value of the domestic currency.”