Barring unanticipated shocks, the Bank of Ghana is forecasting a further decline in headline inflation to between 13 and 17 percent by the end of 2024, before gradually trending back to within the medium-term target range of 6 and 10 percent by 2025.
According to its January 2024 Monetary Policy Report, the major risk to the inflation outlook is linked to the escalation of geopolitical tensions and potential spillovers to the commodities markets, especially international crude oil prices, which could undermine the disinflation process.
However, it said there are clear indications that the current macroeconomic framework being implemented with the support of the International Monetary Fund-Economic Credit Facility programme is yielding results.
Moreover, the Bank of Ghana said improved forex inflows from the IMF-ECF disbursements, receipt of the cocoa syndicated loan, and expected funding from the World Bank are expected to improve foreign exchange inflows. Inflation went up marginally in January 2024 to 23.5% as it resumed the upward trajectory according to data from the Ghana Statistical Service.
This follows five consecutive months of decline. Inflation stood at 23.2 percent in December 2023. According to the GSS, the increase in year-on-year inflation was influenced by a sharp surge in non-food items including housing, clothing and transport. Non-food inflation increased to 20.5 percent in January 2024 from 18.7 percent in December 2023.
Source: MYJOYONLINE.COM