Inflation in Ghana is a complicated issue – BoG

The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has said inflation rate in the country is a complicated economic issue.

According to the Governor, his outfit since last year has been trying to manage inflation but was shocked with some of the outcome this year.

“It is a very complicated environment as you are aware, we have just come out from COVID-19. Ghana fortunately, is able to weather the impact of COVID-19.

“At the central bank, we have anticipated this in November last year, we raised the policy rate by a 100 basis points and then we were rather surprised by the inflation rate later which came on after that in February in particular, which triggered the 200 basis point adjustments in the policy rate, the Governor disclosed in an interview with Bloomberg ahead of the MPC meeting.

He continued: “Government and the Central Bank are very much aware of the problem. We’ve had very major decisions on fiscal consolidation. Expenditures have been cut by 20% among other things. We expect that these measures will serve as an anchor to inflation.

“A lot of the shocks that we are seeing now tend to be supply-side in nature, but we think the worst has gone through the system, and we expect that inflation will be tapering off for the rest of the year.”

Mr. Addison added that the Monetary Policy Committee (MPC) is expected to meet this week and has issues of inflation on the agenda.

“This week, the MPC will be meeting, I do not want to pre-empt what the Committee would decide but I think it is a very complicated situation.”