Regardless of the hike in inflation rate in recent months, the Bank of Ghana is optimistic prices of goods and services will come down in the coming days, weeks and months.
This pledge is coming after increases in transportation fares and rising food prices pushed the rate of inflation to 27.6% in May 2022, from 23.6% in April 2022.
Speaking at a Financial Literacy Programme for Journalists, the Director of Research at the Bank of Ghana, Dr. Philip Abradu Otoo, said the Monetary Policy Committee of the Central Bank is working assiduously to control the rate of inflation to stabilise the economy.
According to him, the Central Bank is bullish about the prospect of achieving a lower inflation rate soon.
He explained that the current rains will aid in the bumper harvest in the agriculture sector, helping to reduce food prices, while the Central Bank’s monetary policy is geared towards bringing down inflation in the non-food category.
“It’s a marginal slowdown, but if you recall the Governor [Dr. Ernest Addison] at his press conference said inflation will peak around June 2022 and July 2022. The numbers came in a little strong this time, but I think the numbers will come down; it cannot continue forever”, he said.
“Monetary policy will begin to work. Our discussion with the Meteorological Department shows that the rains this year are better than that of last year, which forecast an improvement in the food situation somewhere in September [2022], whereas the Monetary policy continue to work around the non-food sector”, he added.
Furthermore, Dr. Otoo said the fall in reserves is due to the unsustainable debt caused by the depreciation of the cedi and the economy’s recovery from the COVID-19.
“The first is debt which is a fiscal problem and we see debt consuming part of our reserves. The debt problem; when government wants to service its debt, it normally provides the Central Bank with cedis and we then rely on our reserves to make settlement”, he revealed.
“We are coming back and the economy is rebounding from COVID-19. And we’ve seen economic activities pick up and import have risen significantly“, he maintained.
The theme for the financial literacy training workshop for journalists was “Sustaining the recovery, the role of the journalists in building confidence”.