Ghana’s macroeconomic indicators turn positive under IMF supported reforms: BoG
Ghana’s macroeconomic indicators have been turning positive under the International Monetary Fund (IMF)-supported economic reforms, the Bank of Ghana has said.
“There are clear indications that the current macroeconomic framework being implemented with the support of the IMF Extended Credit Facility (ECF) programme is yielding positive results,” Ernest Addison, Governor for Bank of Ghana, said at a news conference Monday after the 116th Monetary Policy Committee (MPC) meeting.
Addison observed that inflation, one of the critical indicators has trended down by more than 30 percentage points in 2023, attributing this development to several factors, including the tightening monetary policy stance throughout 2023.
He said favourable international crude oil prices, which led to stable ex-pump prices and transportation costs, and relative stability in the exchange rate, also contributed to the steep fall in inflation.
Headline inflation declined to 23.2 percent year on year in December, from 26.4 percent recorded a month earlier.
“The latest forecast suggests that the disinflation process will continue, and headline inflation is expected to ease to around 13 percent and 17 percent by the end of 2024 before gradually trending back to within the medium-term target range of 6.0 percent and 10 percent by 2025,” the governor added.
These forecasts notwithstanding, Addison cautioned that there are upside risks to the inflation outlook, adding, “The inflation rate is still high, and we are not totally out of the woods yet. But at the same time, we are looking at the growth side to make room for economic activities to thrive.”
In line with that the MPC decided to cut the bank’s benchmark policy rate by 100 basis points to 29 percent, from 30 percent.
The governor called for the strict implementation of the 2024 budget and a tight monetary policy stance to sustain the disinflation process.
The West African cocoa, gold, and crude oil exporter has been implementing an economic reform program, with support from the International Monetary Fund, to revitalize the economy, distressed since 2021.