Even though economic activity globally is projected to improve on the back of the pro-growth agenda of the new US administration and some turnaround in commodity prices, especially crude oil, certain underlying global risks could adversely impact Ghana’s balance of payments, fiscal operations and the inflation outlook.
Dr Abdul Nasir Issahaku, Governor of the Bank of Ghana (BoG) and chairman of the Monetary Policy Committee (MPC), who dropped the hint yesterday in Accra during a press conference, said such risks included a stronger US dollar and rising global bond yields on the back of expected hikes in the Fed funds rate.
“For the first time since 2011, the provisional balance of payments in 2016 recorded a surplus. This was attributed to a narrowing of the current account deficit driven largely by improvement in the trade balance. The improvement more than compensated for the moderation in the capital and financial accounts arising from lower official foreign inflows.”
Overall BoP as at December 2016 was US$247.4 million, representing 0.6 percent of GDP while gross foreign assets recorded an amount of US$6161.8 million, representing 3.5 months of import cover.
Foreign exchange
According to Dr Issahaku, Ghana’s foreign exchange market witnessed some volatilities in the run-up to the December polls, as demand pressures mounted, adding that the pace of depreciation had since slowed down.
“In 2016, the Ghana cedi recorded a cumulative depreciation of 9.6 percent against the US dollar compared to 15.7 percent in 2015. In the outlook, the tight monetary policy stance, renewed confidence in the economy and improved balance of payments outturn are expected to support stability in the foreign exchange market.”
Headline inflation
He also said there were concerns regarding the inflation outlook, which could be impacted by the pass-through effects of the recent exchange rate volatility, persistent increases in food inflation and the fiscal outturn.
“There is therefore the need to return to the path of fiscal consolidation to complement the tight monetary policy stance to deliver on the medium term inflation target.”
Growth
The BoG Governor stated that although growth conditions remained modest, prospects were positive, underpinned by improved oil and gas production from the new oil fields, gradual rebound in growth in private sector credit and improved sentiments and expectations.
“In the outlook, the risks to growth include policy uncertainties, especially in the global environment.”
Policy rate
The MPC maintained the monetary policy rate (MPR) at 25.5 percent.
Source: Daily Guide
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Dr Abdul Nasir another NDC Amissah Arthur clueless about fiscal and monetary policy ; please do not come giving Ghanaians a coc--ktail of your toxic DUNG economic thoughts and figures that you churned out during the Jon Mahama period because both Jon Mahama ; Amissah ; Seth Terpkor and others did not know what they were doing ; today we have a new bred of proper economists and people who better understand the economy therefore you better start packing your bags at BOG ; do not forget we have straight talking people like Dr Bawumia a guru at economics ; Osafo Marfo an experienced economic strategist and Ken Ofori -Atta a person who have done it before and achieved results not uless ediots like you who want to continue to pump fantasy economic reports to Ghanaians ;during the last elections you told us inflation was falling ; if that is the case why do you again tell us that there are concerns about inflations just six weeks after the elections what measures did you put in place afterall the currency have been stabilsed due to the IMF programme or debt ; you have simply copied what Osafo -Marfo and Ken Ofori-Atta said about contrlooing fiscal policy ; did you do that in the last government ; your growth anailsis is just a load of economic faeces; again you cpoied what the NPP gurus said ; increase in private sector investment and credit to stmulate growth; there is no such thing as 'global uncertainties' because as an economy ; it is your policy trends that will determine your ability to compete on the global stage ;your written piece is called application of lazy bench mark economics; your inflation preview is a load of 'CRAB'again you are just cpoying what the NPP pundits have said ; WHY DID YOU NOT TAKE ALL THESE MEASURES DURING THE NDC TIME : NOW YOU PONTIFICATING SUCH POLICIES -MINE FRINED START PACKING YOUR BAGS because you are not fit for PURPOSE !!!!!