First Deputy Governor of the Bank of Ghana (BoG), Dr Maxwell Opoku-Afari has said that despite strong rebound from the pandemic in 2021 as evidenced by the 5.4 percent overall real GDP growth and 6.3 percent non-oil Gross Domestic Product(GDP) growth, recent data points to some softening in the growth momentum.
National accounts data released by Ghana Statistical Service (GSS) showed that the economy grew, in year-on-year terms, by 3.6 percent in the first quarter of 2022, well below the then 5.6 percent expected growth for 2022, he said.
First Deputy Governor’s Keynote Address at BoG Training Workshop for Financial and Business Journalists in the Northern Zone of Ghanahttps://t.co/qWQZoZePL3 pic.twitter.com/byKkEogaBQ
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High frequency data such as the Composite Index of Economic Activity (CIEA), Business and Consumer Confidence Indices seem to confirm softening of economic activity.
This has prompted downward revision of the growth target to 3.7 percent from the initial 5.6 percent target, he intimated.
“Significant downside risks remain in the outlook, including further headwinds from the Russia-Ukraine war and potential outbreak of new variants of the Covid-19 pandemic,” he said at a Financial Literacy workshop for journalists in the Northern Zone of Ghana.
Touching on Inflation rate, he said this headline inflation has shifted well above the upper band of the medium-term target, driven mainly by food prices, transport costs, upward adjustments in ex-pump petroleum prices, and pass-through of exchange rate depreciation.
The latest data shows that headline inflation rose sharply to 31.7 percent in July 2022 from 29.8 percent in June 2022 on the back of significant increase in both food inflation and non-food inflation. Inflation was 9 percent just a year ago in July 2021.
The Bank’s forecast indicates that inflation would peak later this year and begin trending back towards the medium-term horizon.
“There are however significant upside risks to the inflation outlook, including increased commodity prices, particularly crude oil, heightened supply chain disruptions, and the over 20 percent increase in utility tariffs set to kick in from 1st September 2022.
“These are all sources of noise to the economy and the conduct of Monetary Policy.”
By Laud Nartey|3news.com|Ghana