The Central Bank has projected inflation rate to start reducing and trending backwards to the Bank’s medium-term target of 6-10% possibly by the start of the fourth quarter of this year.
The new forecast by the apex bank is a review of its earlier forecast to which the Governor, Dr Ernest Addison, during an interview with Bloomberg noted, inflation had peaked in May and that inflation was expected to reduce for the rest of the year.
“The Bank’s forecast indicates that inflation would peak later this year, and begin trending back towards the medium-term horizon,” stated Dr Philip Abradu-Otoo, Director of Research at the Central Bank.
He made the assertion reading a speech on behalf of the First Deputy Governor of the Bank of Ghana, Dr Maxwell Opoku-Afari during a financial literacy workshop for journalists in the northern zone of Ghana.
The workshop was held under the theme, “Sustaining the Recovery: The Role of the Journalist in Building Confidence” and was aimed at equipping journalists with a better understanding of issues such as Monetary Policy formulation, inflation targeting, among others.
Speaking further on the subject of inflation, Dr Abradu-Otoo remarked that there are significant upside risks to the country’s inflation outlook in the form of increased commodity prices particularly crude oil, heightened supply chain disruptions coupled with the recent 20% upward adjustment in utility tariffs.
Headline inflation has shifted well above the upper band of the Bank’s 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.
Speaking on the role of financial and business journalists in sustaining economic recovery through confidence building and bringing calm to financial markets, Dr Abradu-Otoo noted the media’s role in influencing the economic narrative is even more important during periods of heightened uncertainty when all kinds of news including fake news are rife on social media, even at times within mainstream media.
The spread of such misinformation, he stated, has the potential to jolt financial markets and create panic among the general public with dire implications for financial stability.
“Under such instances, business and financial journalists have additional responsibilities to help financial market participants and the general public to draw a clear distinction between facts and fiction and decide the newsworthiness of the information at hand for accurate reportage, a crucial ingredient for confidence building,” he stated.