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In a recent statement, Dr Ernest Addison, the Governor of the Bank of Ghana
(BoG), emphasized that the central bank will maintain a tight monetary policy
stance until it is confident that inflation is firmly anchored and aligned with
the planned disinflation path agreed upon with the International Monetary Fund
(IMF). This decision aims to ensure stability in the Ghanaian economy.
According to Governor Addison, Ghana has experienced relative stability in its
exchange rate, with a depreciation of only 2.5 percent between February and the
present. He emphasizes the importance of sustaining this positive performance
and consolidating the gains achieved thus far.
Dr Addison expressed gratitude to the entire IMF team for their constructive
engagement over the past two weeks regarding fiscal policy, monetary policy,
and structural reforms. He highlighted the comprehensive and collaborative work
between the Ghanaian government and the IMF, recognizing the decisive measures
implemented by both parties to yield positive results. This unexpected
turnaround in the economy needs to be sustained as the country resets itself.
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Specifically, Dr Addison drew attention to the significant reduction in
non-food inflation by 19 percentage points and food inflation by 8 percent.
Moreover, core inflation, which measures underlying inflation, is decelerating
at a rapid pace. Since the beginning of the year, the Bank of Ghana has built
reserves of about US$650 million instead of the projected drawdown of US$98
million. This positive outcome has been augmented by the innovative Gold for
Reserves program.
The relatively stable exchange rate, depreciating by only 2.5 percent between
February and the present, underscores the importance of maintaining this strong
performance and consolidating the gains achieved. Looking ahead, the Bank of
Ghana remains committed to a tight monetary policy stance until inflation is
confidently anchored in line with the agreed disinflation path.
Governor Addison highlighted that challenges and difficulties are expected during efforts to sustain these gains. However, the focus remains steadfast on implementing reforms and prudent policies to ensure the full benefits of the program are realized.
Last week, Stéphane Roudet, the Chief of Mission of the IMF, acknowledged that Ghana's economic recovery was surpassing expectations. He described the growth dynamics as better than anticipated, emphasizing this positive news during a joint press conference with Finance Minister Kenneth Nana Yaw Ofori-Atta. Roudet commended the improvements in various indicators, such as declining inflation and increasing international reserves, which boost confidence. The overall economic situation in Ghana is experiencing a marked turnaround, displaying emerging signs of macroeconomic stability.
However, Roudet cautioned the authorities against complacency and urged them to continue striving towards further improvement. Finance Minister Ofori-Atta expressed confidence in Ghana's economic recovery, stating that the economy had already responded positively and strongly to news of the Ghanaian government and the IMF reaching an LSA (Letter of Support) for the first review. The government is eager to leverage this positive development.
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