By Adelaide Kotey The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has to maintaiedn its policy rate at 12.5%. The policy rate is the rate at which the central bank does overnight lending to universal banks in the country.
The committee maintained the rate based on a number of factors including, strong revenue mobilization, the pick-up of economic activity, and positive macro-economic conditions. The Governor of the BoG, Kwesi Amissah-Arthur disclosed this at press conference in Accra, last week.
He said that, “Inflation expectations are well-anchored and have stabilized along the single digit path, supported by favourable food prices. The rate has continued to decline and the 9% target for the year is achievable”.
Statistics from the Ghana Statistical Service (GSS) show that overall inflation declined from 9.2% in February this year to 8.6% in June 2011, and further down to 8.39% in July.
The deceleration in headline inflation is largely attributed to continued reduction in food inflation, which reached 3.3% in July, down from 4.5% recorded in December 2010. Non-food inflation, on the other hand, has gone up slightly from the 11.2% recorded at the end of December 2010 to 11.8% by the end of July, according to the Governor.
The core measure of inflation used by the BoG to monitor underlying inflation pressures in the economy (defined to exclude energy and utilities charges from the Consumer Price Index (CPI) basket), exhibited signs of stability. The rate declined from 8% at the end of December 2010 to 7.8% at the end of July 2011.
Results of the bank’s recent survey on inflation expectations show that consumers and financial institutions are optimistic that inflation would remain within single digits by the end of 2011.
Amissah-Arthur, who is also the Chairman of the MPC, revealed that “estimates of the real Composite Index of Economic Activity (CIEA) for the first half of 2011 show that the level of economic activity increased, on a year-on-year basis by 20.5%, compared to 19.4% in May 2011.
All the components of the CIEA (port activities, SSNIT contributions, merchandise exports and imports, sales of key manufacturing establishments, bank credit and domestic VAT collection) contributed to the increase in economic growth”.
The consumer survey also showed a generally positive assessment of macroeconomic conditions and prospects. The Consumer Confidence Index increased to 102.1 in August, from 99.5 in June 2011.
The committee maintained the rate based on a number of factors including, strong revenue mobilization, the pick-up of economic activity, and positive macro-economic conditions. The Governor of the BoG, Kwesi Amissah-Arthur disclosed this at press conference in Accra, last week.
He said that, “Inflation expectations are well-anchored and have stabilized along the single digit path, supported by favourable food prices. The rate has continued to decline and the 9% target for the year is achievable”.
Statistics from the Ghana Statistical Service (GSS) show that overall inflation declined from 9.2% in February this year to 8.6% in June 2011, and further down to 8.39% in July.
The deceleration in headline inflation is largely attributed to continued reduction in food inflation, which reached 3.3% in July, down from 4.5% recorded in December 2010. Non-food inflation, on the other hand, has gone up slightly from the 11.2% recorded at the end of December 2010 to 11.8% by the end of July, according to the Governor.
The core measure of inflation used by the BoG to monitor underlying inflation pressures in the economy (defined to exclude energy and utilities charges from the Consumer Price Index (CPI) basket), exhibited signs of stability. The rate declined from 8% at the end of December 2010 to 7.8% at the end of July 2011.
Results of the bank’s recent survey on inflation expectations show that consumers and financial institutions are optimistic that inflation would remain within single digits by the end of 2011.
Amissah-Arthur, who is also the Chairman of the MPC, revealed that “estimates of the real Composite Index of Economic Activity (CIEA) for the first half of 2011 show that the level of economic activity increased, on a year-on-year basis by 20.5%, compared to 19.4% in May 2011.
All the components of the CIEA (port activities, SSNIT contributions, merchandise exports and imports, sales of key manufacturing establishments, bank credit and domestic VAT collection) contributed to the increase in economic growth”.
The consumer survey also showed a generally positive assessment of macroeconomic conditions and prospects. The Consumer Confidence Index increased to 102.1 in August, from 99.5 in June 2011.
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