Inflation in Ghana finished the year 2021 at 12.6%, the Bank of Ghana has announced.
This is contained in a press release issued by the Central Bank after its Monetary Policy Committee (MPC) held its 104th meeting and the first meeting for the year.
“After falling to 7.5 percent in May 2021, inflation increased throughout the second half of the year, ending December 2021 at 12.6 percent,” the BoG press release has said.
Meanwhile, non-food inflation went up from 9.2 percent in May 2021 to 12.5 percent in December 2021 while food inflation, over the same period rose sharply, moving from 5.4 percent in May 2021 to 12.8 percent in December 2021.
According to the Bank of Ghana, the upward trajectory of inflation in the second half of 2021 reflected food supply challenges, rising crude oil prices, and some pass-through effects of exchange rate depreciation in the last quarter.
From the 12.6% figure ending December 2021, the BoG notes that inflation had moved outside the upper band of the medium-term target by 2.6 percent.
Despite these inflation figures reflecting in January 22, the Bank of Ghana says it is maintaining its Policy Rate at 14.5%.
“The latest forecast shows that inflation would likely remain above target in the near-term, driven by both external and domestic factors, and only return to target in about four-quarters ahead.
“The Committee is of the view that the dynamics associated with the November 2021 policy rate hike are yet to be fully transmitted and expects the decisive implementation of the fiscal correction measures, especially the 20 percent cut in expenditure to help moderate the upside risks to the inflation outlook.
“Under these circumstances, the Committee has decided to keep the policy rate unchanged at 14.5 percent,” part of a release from the Bank of Ghana has announced.
Meanwhile, the Monetary Policy Committee is set to continually monitor the impact of these policy measures and when needed will call an extraordinary meeting to re-assess the inflation outlook over the forecast horizon and take the necessary policy decisions accordingly.
The next meeting of the Committee is scheduled for 23rd – 25th March 2022.
The meeting will conclude on Monday, 28th March 2022 with the announcement of the policy decision.
Source: Modern Ghana
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