Mr Seth Terkper, the Minister of Finance stated on Friday that inflation remained largely subdued in advanced economies, mostly reflecting the decline in oil prices and softer prices for other commodities.
He said average inflation was projected to decline to 0.3 per cent in 2015, down from 1.4 per cent in 2014, and thereafter rise to 1.2 per cent in 2016 in advanced economies.
“In emerging markets and developing countries, lower commodity prices including oil and food have generally contributed to lowering headline inflation, except in countries where large currency depreciations offset the impact of lower commodity prices,” he said.
Mr Terkper was presenting the 2016 Fiscal Budget and Economic Policy to Parliament under the theme, “Consolidating Progress towards a Brighter Medium Term”.
He said in sub-Saharan Africa, average inflation was projected to inch up marginally to 6.9 per cent in 2015, up from 6.4 per cent in 2014 and further to 7.3 percent in 2016.
On commodity prices, he said oil prices had declined significantly, after experiencing large swings in the second quarter of 2015.
Mr Terkper said the decline was on account of strong supply from members of the Organization of Petroleum Exporting Countries (OPEC) and the Islamic Republic of Iran’s nuclear deal.
Global excess supply of oil has continued to increase in 2015, in spite of the fall in investment in the oil sector, he added.
“Crude oil prices reached 59.82 dollars a barrel in June 2015 and fell further to 42.46 dollars a barrel in September 2015, compared to Ghana’s annual benchmark revenue projection of 99.38 dollars a barrel for 2015 which was later revised to 57 dollars per barrel.
“However, the IMF‟s October 2015 World Economic Outlook projects an average1 crude oil price of 51.62 dollars a barrel in 2015, 50.36 dollars in 2016, and 55.42 dollars in 2017″, he stated.
On the Cocoa sector, he stated that Cocoa prices rose in the second quarter of 2015 as a result of weather-related supply shortfalls in Ghana, whiles demand remained strong.
He said according to the Business Monitor International report of October 2015, cocoa prices were expected to peak in 2015 before lowering in the beginning of 2016 to the end of the forecast period in 2019.
“The market is projected to register a small surplus in the 2015/16 season, on account of a rebound of production in Ghana, due to greater use of inputs and expectations for better weather and weak growth in global demand in 2016, as grinding margins remain poor.
“According to the ICBC Standard Bank estimates, Gold prices are generally expected to trend downwards peaking around 1,160 dollars per ounce in 2016 as the Federal Open Market Committee (FOMC) normalizes United States monetary policy,” he said. GNA