As 2019 growth is projected at 7.6% Bank of Ghana keeps policy rate at 16%
The Bank of Ghana this morning announced no change in the current policy rate, keeping it at 16 per cent. Making the announcement at press conference at the central bank, the Governor, Dr. Ernest Addison said among other things that growth remains relatively strong and the negative output gap seems to be closing, although at a relatively modest pace.
“Overall GDP growth for 2018 is projected at 5.6 percent, while non-oil GDP is projected to expand at 5.8 percent,” he said.
According to the Governor, with an average growth of 6.1 per cent for the first three quarters of 2018, the broad expectation is that the annual target of 5.6 per cent will be realized.
“For 2019, GDP growth is projected at 7.6 per cent,” he said.
He pointed out that two inflation readings released by the Ghana Statistical Service since the January Monetary Policy Committee meeting showed inflation still within the medium term target band.
“Inflation decelerated in January to 9.0 per cent, from 9.4 per cent in December 2018, but inched up to 9.2 per cent in February 2019 driven by increases in non-food inflation. Since the last quarter of 2018, inflation has oscillated within a band of 9.0 – 9.5 percent, underpinned by a relatively tight monetary policy stance. Underlying inflationary pressures, as measured by the Bank’s core inflation have continued to ease and inflation expectations remain well-anchored,” he said.
According to the Governor, the pace of economic activity, captured by the Bank’s updated Composite Index of Economic Activity (CIEA) remained strong, recording an annual growth of 3.2 per cent in January 2019, up from 2.4 per cent in December 2018.
He indicated that, in the same period of 2018, the CIEA registered a 3.6 per cent growth.
The increase in January was mainly driven by growth in Domestic VAT, Industrial Consumption of Electricity, Port Activity and Imports. Latest results from surveys conducted by the Bank of Ghana in February 2019 show an improvement in consumer confidence even though recent depreciation in the currency affected business sentiments, he added.
By Emmanuel K. Dogbevi
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