The general rate at which prices of goods and services increases, otherwise known as Consumer Price Index (CPI), closed year 2018 in Ghana with 9.4 percent in December, meaning government could not achieve its inflation target of 8.9 percent.
Compared to same period last year, the inflation rate was 11.8 percent. The December rate of 9.4 percent is 0.1 percentage point higher than which was recorded in the previous month— November 2018.
According to Acting Government Statistician, David Kombat, the marginal rise between the two months can be attributed to both food and non-food group experiencing increment in their price levels.
“We can see that with the non-food group, inflation rate rose by 0.1 percentage points—from 9.7 percent in November to 9.8 percent. And for the food group, it rose from 8.6 percent in November 2018 to 8.7 percent in December. These were mainly responsible for the slight increase we are seeing,” he said.
Meanwhile, the Ghana government in the 2019 budget, has set an end of year inflation target of 8 percent. If measures are put in place by managers of the economy to ensure that this target is achieved, it will come as a boost to the business community as the Bank of Ghana will have the space to further reduce the policy rate, thereby moving banks to reduce their interest rates to encourage the private to access loans to inject in their business as capital.
The Monetary Policy Committee (MPC) of the central bank had to keep the policy rate at 17 percent in last meet in November 2018 citing risk in inflation as main reason.
“Latest inflation forecasts showed a continued disinflation path but risks remain, especially from the external environment which may impact adversely through the trade and financial channels. Given these considerations and weighing the balance of risks, the Committee decided to keep the policy rate unchanged at 17 percent, while closely monitoring developments, especially in the global economy,” Governor of the Central Bank, Dr. Ernest Addison said.