Expectations of government of Ghana to bring inflation down to a medium term target of 8.0 percent plus or minus two percent seems on course as headline inflation rate slid 0.2 percentage points to 10.4 percent, in March relative to the 10.6 percent recorded in February , according to figures released here on Wednesday by the Ghana Statistical Service (GSS).

This development, Baah Wadieh, Acting Government Statistician explained was due to the slight decreases in inflation rates for mostly items under the Non-Food category.

The monthly change rate for the period between February and March was 1.6 percent, compared with the 0.9 percent recorded previously.

“We realized there were drops in the inflation rates for non-food sub-sectors of Hotels, Cafes and restaurants; Miscellaneous goods and services; recreation and Culture; a slight decline in transportation and Housing, electricity and water; clothing and footwear ; as well as furnishing household equipment and routine maintenance, leading to the slight dip in the inflation rate for the month under review” Wadieh explained.

Inflation rate is one of the key variables used by commercial banks to fix their interest rates , while at the same time, investors also watch the direction of inflation to make their investment decisions.

There has been a trending down in inflation rate from 15.4 percent in December 2016 , while the Central bank commenced an easing in its benchmark policy rate from the previous 25.5 percent to 23.5 percent in March 2017, and continued till it got to 18 percent last month.

Ghana entered a three years Extended Credit Facility (ECF) agreement with the International Monetary Fund (IMF) in 2015 to help improve its macro-economic indicators which had been in some distress due to harsh external factors and a massive fiscal slippage in 2012.

Industry watchers expect that the easing in headline inflation rate and the central bank policy rate coupled with the reduction in government’s budget deficit could help bring down the cost of borrowing which may help businesses expand to create jobs and wealth. Enditem,


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