Ghana’s soaring inflation rates and its associated impact is likely to make it difficult for policymakers to take key decisions, a Bloomberg report has said.
Ghana’s inflation rate for April, according to the GSS spiked significantly to 23.6 percent from an earlier 19.4 percent recorded in March this year – the highest since 2004.
For the period, imported goods for the first time exceeded domestic inflation at 24.7 percent from an earlier 17.3 percent recorded for March. Inflation for locally produced items was however 23 percent from a previous 20 percent recorded in March.
The central bank governor, Dr Ernest Addison speaking in a virtual interview with Bloomberg on May 16 somewhat admitted the Monetary Policy Committee has a key decision to take at its 106th scheduled meeting later this week.
“It’s an issue, which in a sense is baffling for all of us. I do not want to preempt what the Monetary Committee Policy will decide, but I think it’s a very complicated situation,” Dr Addison said
“A lot of the shocks that we are seeing now tend to be supply-side in nature and we expect that inflation will be tapering off for the rest of the year,” he added.
Touching further on the impact of economic growth and the impact of inflation ahead of a policy rate decision, Dr. Ernest Addison said, “I believe that if we were to choose between growth and inflation, the policy priority should be on managing the pace at which prices are rising.”
Meanwhile, the Bank of Ghana MPC is expected to commence its scheduled meetings for the third meeting of the year from Wednesday, May 18 to May 20.
At the bank’s second and 105th meeting, it hiked the policy rate to 17 percent from 14.5 percent. It explained its decision was to deal with the current economic conditions which include fiscal pressures, inflation, exchange rate volatility among others.
