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Ghana News

Deputy Governor of BoG Expresses Optimism for Ghana’s Inflation Rate To Drop Further

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The Second Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi, has expressed optimism that the inflation rate in Ghana would continue to decrease. Speaking at the launch of a partnership between Absa Bank and the Mastercard Foundation to offer loans to small-scale businesses at 10%, she said that there is a signal of improvement in the macro economy, and as a result, they expect things to get better.

For the most part, the inflation rate has dropped from about 50% some months ago to 41.2% for April 2023. The Monetary Policy Committee also projects that the inflation rate will drop further and lending rates will come down.

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She urged other banks to follow in Absa Bank’s footsteps and bring down lending rates to further support small and micro-enterprises that form the backbone of the economy. This, she said, is especially important with the Africa Continental Free Trade Agreement onboard as she wants to see more lending to the sector at lower rates so that Ghanaian businesses can be competitive.

The Ghana Statistical Service has revealed that the inflation rate for April 2023 dropped to 41.2% from 45% in March 2023. Food inflation also dropped to 48.7% in April 2023 from 50.8% in March 2023. Non-food inflation followed suit, declining to 35.4% in April 2023 from 40.6% in March 2023.

Inflation for locally produced items stood at 38.2%, whereas inflation for imported items was 43.1%. Housing, Water, Electricity, Gas and Other Fuels, Furnishing, Household Equipment and Routine Household Maintenance, Food and Non-Alcoholic Beverages, Personal Care, Social Protections and Miscellaneous Goods and Services, and Transport recorded inflation rates higher than the national average.

For the most part, Tea and Related Products, Cereals and Cereal Products, Milk and Dairy Products, Fish and Other Sea Foods, Sugar, Confectionary and Desserts, Fruit and Vegetable Juices, Oil and Fats, and Water recorded year-on-year inflation higher than the overall food inflation.

In a nutshell, the inflation rate in Ghana is dropping, and the government is optimistic that this trend will continue. The private sector is also playing its part in supporting small and micro-enterprises with lower interest rates. The drop in food inflation is also a positive sign, but more needs to be done to support specific sectors with higher inflation rates.

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