Ghana’s inflation to decline – IMF

mr-joel-toujas-bernate

Mr. Toujas-Bernate

Ghana’s inflation should slow to 13.5 per cent by the end of the year, from 16.9 per cent in August, Joel Toujas-Bernate, head of the IMF’s Ghana mission has said.

The senior IMF official told reporters on a video conference call from Washington that the country should also reach its inflation target by the middle of 2017.

The Bank of Ghana’s inflation target stands at eight per cent plus or minus two percentage points.

Ghana is in year two of a three-year IMF programme worth around $918 million, meant to restore fiscal stability after a fall in commodity prices hurt the economy.

The Fund disbursed the fourth tranche of aid under the programme last month.

“There has been good progress so far but Ghana needs to continue reform efforts to make the macro and financial environment more conducive for job creation,” Mr. Toujas-Bernate said.

He revised Ghana’s budget deficit forecast for 2016 to 5.2 per cent of GDP from 4.8 per cent in May, due to oil-revenue shortfalls.

In addition, Mr. Toujas-Bernate said that debt should fall to below 68 per cent of GDP in 2016, from 72 per cent last year.

A continued decline “will go a long way to restore investor confidence and enhance public finance,” he said.

He said consumer price growth should slow to within the Bank of Ghana’s target of 6 per cent to 10 per cent in the second half of 2017.

“The central bank’s monetary policy committee rate should come down from next year as inflation eases,” Mr. Toujas-Bernate said.

The BoG held rates at 26 per cent at its last MPC meeting on September 19.

The IMF is an organisation of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

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