Ghana’s inflation, interest rates to worsen

Ghana’s inflation and interest rates are expected to inch up further before the year ends.

This is an indication that government and the Bank of Ghana’s tight fiscal and monetary policy will continue unabated, crowding out the private sector from accessing credit.

Already, some analysts and market watchers are projecting an almost 20 percent inflation rate by the end of 2015 per current price levels and anticipated increase in utility tariffs.

Investment firm, Investcorp had reported that the 91-day Treasury bill will end the year with a yield of about 27 per cent.

Presently the 91-day Treasury bill is going for 25.3 whilst the 182-day short term security is selling at 26.1 percent.

Government Statistician, Philomena Nyarko said inflation will go up in the coming months particularly due to the expected increases in electricity and water bills.

According to her, the expected increase in the tariffs will impact some sectors of the economy compelling prices of some items to go up.

Historically, inflation goes up during the months of October, November and December due to large volumes of imports for the Christmas period.

The country’s currency, the Ghana Cedi which has been very volatile in recent times could also pose a threat to inflation.

Year-on-year inflation hit 17.4 percent in September, 2015 after recording a 17.3 percent rate in August.

While food inflation rate for September was 7.8 percent compared with 7.7 percent recorded in August, the non-food inflation rate were 23.2 per cent and 23.4 per cent in September and August respectively .

Also, inflation rate for imported items was 17.4 percent in September compared with 18.1 percent recorded in August while the inflation rate for locally produced items were 17.3 percent in September and 17.0 percent in August respectively.

Within the food group, only one of the sub-groups (vegetables) recorded an inflation rate higher than the group’s average of 7.8 percent.

Education (29.6); Recreation and culture (27.0); clothing and footwear (24.9); transport (23.8); housing, water, gas and electricity (23.6), furnishings, household equipment and routine maintenance (23.4).

Miscellaneous goods and services (23.0), alcoholic beverages, tobacco and narcotics (20.8), hotels, cafes and restaurants (18.0) all recorded inflation rates higher than the national average.

Source” The Finder

Leave a Reply