2017 Budget To Determine BoG’s Single Digit Inflation Target

The Ghana Statistical Service has told Citi Business News the Bank of Ghana’s single digit inflation target should be achieved if policies outlined in the 2017 budget impact on prices of goods and services.

The Acting Government Statistician, Baah Wadieh explains to the monetary and fiscal policies that influence pricing would translate into a reduction if the cost of production declines.

“It depends on government policies, these are all policies or instruments that government use to influence inflation either monetary or price deregulation,” he said.

Mr. Wadieh added, “Assuming the effect is that it causes consumer prices to go down; then we could have a further reduction. But assuming the effect is that consumer items go up; then we are not likely to see the reduction that we are looking forward to.”

The Bank of Ghana has been forced to shift its single digit inflation target of 8 percent plus or minus 2, to 2018 after missing earlier deadlines.

In the first MPC meeting for 2017, the former Governor, Dr. Abdul Nashiru Issahaku explained that, “this inflation outlook could however improve if the fiscal consolidation process is restored, alongside monetary policy tightness and exchange rate stability.”

Figures from the Ghana Statistical Service have also shown that inflation has been declining for the past six months.

The figure has since October 2016 been declining from 15.8 percent; it ended 2016 with 15.4 percent.

In January 2017, the inflation inched down further to 13.3 and it is currently at 12.8 percent in March 2017.

Meanwhile Mr. Baah Wadieh explains the single digit target is possible if the budget achieves its intended results.

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(Via: CitiFM Online Ghana)