BOG Keeps Policy Rate Unchanged

BOG BOARD (13)The Bank of Ghana left its main policy rate unchanged at 16.0 per cent in line with expectations, citing a balanced outlook for risks to inflation and growth.

Central Bank Governor Henry Kofi Wampah said risks include an expected hike in utility prices, wage pressures and soft global commodity prices, which could affect the economy.

“The implementation of the budget for the first seven months revealed that fiscal pressures still persist, arising mainly from significant shortfalls in domestic revenue collection and delay in the implementation of utility subsidies,” Wampah told a news conference in Accra yesterday.

“The downside risks include budgetary cutbacks in domestic finance capital expenditures and spending on goods and services in favour of recurrent expenditures such as wages and salaries. Softening consumer sentiments may also pose a downside risk,” Wampah said.

The unchanged rate was expected and the data showed Ghana would likely reach its inflation target in 2014 but there were concerns, said Razia Khan, head of Africa research for Standard Chartered Bank.

“There are doubts as to whether the authorities will achieve their target of limiting the deficit to -9 per cent of GDP in 2013,” said Khan in an email.

 

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