Headline inflation is expected to decline in the coming month due to seasonal conditions, Professor Nicholas Nsowah-Nuamah, Deputy Government Statistician has predicted.
“Due to the trend, inflation is likely to close the third quarter below 20 percent,” he said.
The latest Consumer Price Index (CPI) showed that headline inflation rate fell to 20.50 percent in July, down from 20.74 percent in June - representing a 0.24 percentage point decrease, which is still one-year high.
The new inflation figure is still high for the market, especially business borrowers that are looking to the Central Bank to ease the prime rate held currently at 18.5 percent.
Official data released by the Ghana Statistical Service (GSS) revealed that vegetables and fish contributed the highest to the change, with yam, plantain and cassava being the major contributors.
A decreasing trend in the price of communication and health in the non food component of the CPI also was responsible.
Professor Nsowah-Nuamah, briefing the media in Accra, said the favorable seasonal conditions for food crops and the bumper harvest of fish will continue into the rest of the third quarter.
“We should expect inflation to fall further beginning August,” he said.
Inflation has been on the rise since November last year, remaining above 20 percent in the past six months.
Supply-demand bottlenecks, as well as weak current account position, have been the main drivers of inflation in Ghana.
A Monetary Policy Committee set up for the Central Bank in 2002 to manage inflation, chalked some successes by the framework it provides for inflation targetting.
Meanwhile, the Chair of the Committee who also doubles as the Central Bank Governor, Dr. Paul Acquah, may quit his position by next month following the end of his contract with the Bank.
Brought in by former President John Kufuor in 2001, it is doubtful that Dr. Acquah would accept another contract even if the new administration under President Mills should offer him one.
The market will however look to his successor for a more aggressive stance against inflation.
Dr Acquah is credited with key reforms during an eight-year tenure. He did a lot in asserting the independence of the monetary policy system and improving the payment and settlements systems.
Operating an end-period single-digit inflation target, Dr. Acquah’s work will be commended for bringing inflation down to 9.9 percent (single-digit) in March 2006.
It was the first time that headline inflation came down to single-digit since 9.8 percent was recorded in April 1998.
Names making the rounds to succeed the Governor include Alhassan Andani, the head of Stanbic Bank Ghana, and Kwesi Amissah-Arthur, a President Mills ally who was deputy finance minister under ex-president Jerry Rawlings. Also cited is Togbe Afede, the Agbobgomefia of Ho Traditional Area.
Dr. Acquah won awards for his work, including the 2007 Central Banker of the Year and the Order of the Star of Ghana, the Highest Award by the state.
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