BoG Survey Indicates Mixed Feelings

Bank of GhanaConsumers and business executives have ex-pressed mixed feelings in the latest Bank of Ghana (BoG) consumer and business confidence survey.

Highlighting on the survey conducted this month at the BoG Monetary Policy Committee (MPC) meeting in Accra on Wednesday, the Governor, Dr Henry Kofi Wampah said respondents ‘’were mildly positive about the economic prospects” of the country.

He however, said the consumer confidence index improved during the August survey, saying “the index moved to 77.5 from 76.1 in May 2014”.

The Governor said the business confidence index on the other hand indicated ‘’continued softening in sentiments”.

Dr Wampah said the business confidence index dipped from 82.8 in March to 78.6 in June 2014.

“Among the perceptions cited were: low prospect for improved capital outlay, sales and revenues, negative sentiments on industrial growth and heightened inflation expectations,” he said.

On inflation, the Governor, said inflation had been on the increase trend since the beginning of the year.

Inflation currently stands15.9, according to the Ghana Statistical Service.

Touching on banking issues, Dr Wampah said the banking industry continued to experience steady growth in both nominal and real terms.

“Total assets increased by 39.7 per cent to GH¢44.2 billion in July. Of the total, advances constituted 45.8 per cent,” he said.

The Governor said credit to the private sector remained strong, saying the growth was funded mainly by increased mobilisation of deposits by the banking systems.

“In nominal terms, credit to the private sector grew by 46.2 per cent in July 2014, compared to 28.1 per cent in the same period last year. Real credit growth was 26.8 per cent compared to 14.6 per cent a year ago,” Dr Wampah stated.

He said non-performing loans of the banks increased marginally from 5.3 per cent in July 2013 to 5.4 per cent in July 2014, adding that the capital adequacy ratio for the banking industry declined to 16.2 per cent compared to 18.6 per cent in the corresponding period last year, but remained well above the regulatory threshold of 10 per cent.

On interest rates, Dr Wampah said interest rates had been on the ascendancy on the market between December and August 2014.

He said the rate on the 91-day instrument increased to 25 per cent in August, 2014 from 19.2 in December, 2013, adding that the 182-day instrument increased to 26.4 per cent from 18.7 per cent over the same period.

“The rate on the one-year note rose to 22.5 per cent from 17 per cent, and the rate on the two-year increased to 23 per cent from 16.8 per cent. The three-year bond rate rose to 25.5 from 19.2,” Dr Wampah said.

He said the average lending rates of the banks rose to 27.8 per cent from 25.5 per cent in December 2013, adding that the average rate on a three-month term deposits increased marginally to 23 per cent from 12.5 per cent.

By Kingsley Asare

 

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