New taxes in 2022 budget, increase in petroleum prices dampened consumer confidence but … – BoG

Governor of the Bank of Ghana, Dr Ernest Addison
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Governor of the Bank of Ghana (BoG), Dr Ernest Addison has said that the Central Bank’s latest confidence surveys conducted in December 2021 signalled mixed sentiments.

While consumer confidence softened because of recent increases in ex-pump petroleum prices and the announcement of new tax measures in the 2022 budget, business sentiments, on the other hand improved, Dr Addison said.

He added the improved business sentiments were driven by the achievement of short-term company targets and optimism about companies’ growth prospects.

In addition, the Ghana Purchasing Managers Index (PMI), which gauges the rate of inventory accumulation by managers of private sector firms and which measures dynamics in economic activity, increased for four consecutive months in the second half of 2021—a development which is consistent with the observation of a steady increase in economic activity.

After falling to 7.5 percent in May 2021, inflation increased throughout the second half of the year, ending December 2021 at 12.6 percent, Dr Addison said at the Monetary Policy Committee 9MPC) press conference in Accra on Monday Janury 31.

He further indicated that non-food inflation went up from 9.2 percent in May 2021 to 12.5 percent in December 2021 while food inflation, over the same period rose sharply, moving from 5.4 percent in May 2021 to 12.8 percent in December 2021.

The upward trajectory of inflation in the second half of 2021 reflected food supply challenges, rising crude oil prices, and some pass-through effects of exchange rate depreciation in the last quarter.

At 12.6 percent for December 2021, headline inflation had moved outside the upper band of the medium-term target by 2.6 per cent.

By Laud Nartey||Ghana

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