The Bank of Ghana is likely to revise its medium-term target inflation band of 8+2 percent to 5 percent.
According to the Governor of the Central Bank, Dr. Ernest Addison there might be the need to relook at the medium-term inflation target that we have set for ourselves in order to maintain the competitiveness of the Ghanaian economy.
If you have a higher inflation, just from the inflation differential alone with your trading partners, you lose competitiveness.
“We were forecasting with the 24-month horizon and we are within the target band of 8+2 percent. I think that we all agree that maybe this is the time to relook at the new central point of 8%.
"We have to consider whether it should continue to remain as the next medium-term target for inflation, or whether we could move it downwards towards a lower rate of say 5%, which is close to the level of our trading partners’ inflation rates of about 2%," he said.
Year on year inflation measured by the Consumer Price Index, (CPI), dropped slightly to 9 percent for the 12 months period end January, 2019 from 9.4 percent in December last year, according to figures released by the Ghana Statistical Service last week.
The monthly rate for January 2019 was 1.0 percent, compared to the 1.1 percent recorded for December 2018.
The food inflation for January was 8 percent while the non-food inflation recorded 9.5 percent.
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