IMF decreases Ghana’s inflation forecast to 9.6%

The International Monetary Fund is projecting a 9.6% inflation by the end of the year before returning to target next year.

Based on this, prices of goods and services will inch up but slightly between now and the rest of year.

The new forecast by the IMF is in line with the Bank of Ghana’s target of 8%+/- 2, lower than its earlier projection.

This means your disposable income will not be affected much, whilst your savings will not be eroded as well.

However, any risk to the exchange front -where the cedi has done pretty well so far this year – and the current account, could be challenging.

Inflation spiked to double digits in April last year because of rising food prices due to the partial lockdown, before falling to 7.5% in May 2021 this year.

But pressures from higher fuel and import prices and budget revenue measures could push it up slightly before the end of the year, before returning to target next year.

Already, interest rates on the money market have taken a nosedive, indicating a reflection of the lower inflation.

Lending rates have also fallen to about 20% per annum, a move that will encourage borrowing by the private sector to stimulate growth.

The IMF at the beginning of the year forecast an end-year Inflation rate of 8.7% for Ghana but in May 2021 revised the rate upwards to 9.8%.

It still however makes it one of the countries with the highest increases in prices of goods and services in the ECOWAS sub region.