BoG maintains policy rate at 16 per cent

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has maintained the policy rate at 16 per cent.

The decision to stay the rate is hinged on the Committee’s view that risks to inflation and growth outlook were broadly balanced.

However, the BoG Governor and MPC Chairman, Dr Ernest Addison, said the Committee stood ready to “take decisive policy actions when necessary to ensure that inflation remains within the target band.”

He was addressing the first MPC press conference for the year in Accra on Friday following the committee’s maiden gathering during the week, to discuss recent global and domestic economic conditions.

According to Dr Addison, headline inflation had remained in the single digit since 2018, hovering around 8.0 percent and landing at 7.9 per cent as of the end of last year.

Barring any anticipated shocks, he forecasted that it would remain in the medium-term target ban of eight plus or minus two per cent.

He said GDP growth outturn for the first three quarters of 2019 averaged 6.0 per cent with a percentage difference when compared to same time in 2018 whereas non-oil GDP growth of averagely 5.0 per cent against 5.9 per cent.

Coupled with 3.1 per cent  year-on-year  growth  recorded by  Composite Index of Economic Activity(CIEA), compared with 4.8 per cent same period in 2018, he said  economic growth  continued to be “robust and broad-based” although at a moderated pace relative to 2018.

In 2019, Dr Addison, said total exports increased by 4.6 per cent year-on-year to $15.6 billion, driven mainly by 14.6 per cent growth in gold exports and 8.6 per cent growth in cocoa beans and products.

Imports, he said, grew at a slower pace of 1.5 per cent to $ 13.3 billion, resulting in a trade surplus of $ 2.3 billion in 2019 compared with $1.8 billion in the same period in 2018.

While acknowledging electoral cycle fiscal risks, he said strong commitment by the fiscal authorities to stay on the consolidation path was needed to sustain the stability and growth achieved over the past three years.

“Overall, the economy presents fairly resilient   and robust performance with regards to output growth and a strong trade and payments position”, he said.

On the global front, he said the hold up in the global economy during 2019 had started to recover adding that the decision by majority of central banks to stay interest rates would help emerging market economies.

 He said although the corona virus outbreak posed a new risk to the global economy, its impact was yet to be accessed while the Brexit was not expected to have adverse affect on global economic outlook.


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