Reports
that Ghana has the highest inflation rate in Africa have been debunked
by the Governor of the Bank of Ghana (BoG), who declared that the
country was behind Zambia.
Addressing a press briefing in Accra
recently, Dr. Abdul Nahir Issahaku, Governor, BoG said, “It is not true
that Ghana has the highest inflation rate in Africa. For example,
inflation in Zambia was 21 percent in June while it was 18.4 percent in
Ghana.”
Dr. Issahaku said although inflation remains elevated
above the medium term target, the bank is confident that the current
tight monetary policy stance, ongoing fiscal consolidation and the
stability of the Cedi, would help steer inflation and inflation
expectations to the desired path.
He said BoG is implementing
policy in a way to bring inflation to its medium-term target of 8
percent, though it will tolerate inflation fluctuations of plus/minus 2
percentage points from the target’s midpoint.
Dr. Issahaku said
that observed trends in inflation over the first half of 2016 have
largely been influenced by increases in the prices of petroleum
products, utility tariffs and food prices.
“Since most of these
adjustments are cost push in nature, the current monetary policy stance
of 26 percent is deemed appropriate, hence maintained,” he said.
Inflation Assessment
Dr.
Issahaku said Core inflation (CPI inflation excluding energy and
utility prices) has stabilized in June, indicating some moderation in
underlying inflation.
He said the latest consumer sentiment
survey, conducted in June, reflects marginal uptick in inflation
expectations based on the unanticipated increase in petroleum prices and
the recurring energy supply challenges.
Dr. Issahaku said the
recent price developments affirmed the bank’s earlier forecasts that
inflation would peak in the first quarter of 2016 and is currently on a
gradual descent.
He said the bank’s latest inflation forecast
suggests a slight outward shift in the forecast horizon as increases in
ex-pump prices of petroleum products slowed the pace of expected
disinflation.
Inflation Outlook
In the immediate outlook,
the Governor said the expected disinflation process over the forecast
horizon will remain anchored on monetary and fiscal policy tightness,
stability in the local currency and expected slower food price increases
with the onset of the harvest season.
“There are, however, risks
to the inflation outlook. These include the extent to which petroleum
product prices, transport costs and utility tariffs are adjusted upwards
in the next two-quarters and the potential second round effects from
such adjustments on prices,” he said.
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