Governor Addison Credits Decrease in Inflation to Robust Policies and Prudent Monetary Measures

Dr. Ernest Addison, the Governor of the Bank of Ghana (BoG), attributes the recent decline in inflation to effective economic management, citing strong and innovative policies, along with stringent monetary conditions. A year ago, inflation stood at approximately 54 percent, but Dr. Addison notes that, by the end of 2023, it has been more than halved to 23 percent, as reported by the Ghana Statistical Service (GSS).

The Governor highlighted several factors contributing to the disinflation process, including a steadfast monetary policy stance, stable crude oil prices leading to consistent fuel prices and favorable impacts on transportation costs, a relatively stable exchange rate environment, increased foreign exchange reserves through the gold for reserve program, and favorable climatic conditions benefiting the food supply chain.

Looking ahead to 2024, Dr. Addison anticipates further easing of inflation, underpinned by the continued implementation of sound policies until inflation expectations are firmly anchored toward the single-digit objective. He emphasized the Bank of Ghana’s commitment to monitoring domestic and external developments, ensuring sustained progress without compromising economic growth.

Addressing the banking sector, Dr. Addison assured that banks remain sound, liquid, and profitable. However, he emphasized the need for close monitoring of banks’ capital restoration efforts, particularly following the impact of the Domestic Debt Exchange Programme (DDEP). The Governor anticipates early recapitalization to enhance banking sector resilience and facilitate effective financial intermediation, supporting macroeconomic recovery.

During the joint Ghana-International Monetary Fund (IMF) press conference, held on Friday, January 19, to mark the completion of the First Review of the Extended Credit Facility (ECF) Programme, Dr. Addison expressed confidence in the ongoing economic recovery process. He stressed the importance of executing necessary structural reforms to ensure long-term sustainability and optimal performance of the economy, acknowledging the challenges ahead in 2024.