Dr. Ernest Addison
CONFIDENCE IN the business sector has rebounded
mainly due to favourable company and industry prospects, positive growth outlook
and declining lending rates; results from the Bank of Ghana’s (BoG) latest
confidence surveys have noted.
The survey, conducted in October 2019, also
said “consumer sentiments, on the other hand, remained broadly unchanged from
the previous survey.”
Dr Ernest Addison, governor of BoG, who
disclosed this yesterday at a press conference in Accra, said on the domestic
front, growth momentum continued to remain strong and had been sustained since
last year.
“The Bank’s updated Composite Index of Economic
Activity (CIEA) continues to show a steady pick-up in economic activity. The
CIEA recorded an annual growth of 4.4 per cent in September 2019, compared with
5.8 per cent in the corresponding period of 2018. The key drivers of economic
activity during the period were port activity, domestic consumption, tourist
arrivals and DMB’s credit to the private sector.”
He continued that “Growth in broad money (M2+)
remained strong during the year. In year-on-year terms, growth in M2+ was 16.3
per cent in October 2019. Reserve money also expanded in the review period.
Growth in reserve money went up by 26.1 per cent, compared with 4.3 per cent
over the same comparative period.”
Credit To
Private Sector
The BoG governor also said commercial banks’
credit to the private sector had also continued to improve while annual growth
in private sector credit was 14.0 per cent in October 2019, compared with 11.4
per cent for the same period of 2018.
“In real terms, private sector credit expanded
by 5.9 per cent compared with 1.7 per cent over the same comparative period.
The latest credit conditions survey conducted by the bank in October 2019,
pointed to an ease in the credit stance on loans to households.”
However, he said credit stance on loans to
enterprises tightened, reflecting continuous efforts by the commercial banks to
safeguard the quality of their loan portfolio through improved due diligence
and credit risk management.
“The three readings of inflation since the
release of the rebased Consumer Price Index by the Ghana Statistical Service
show that inflation has remained below its central path of 8.0 per cent.
Headline inflation declined from 7.8 per cent in August 2019, to 7.6 per cent
in September, and has since inched up to 7.7 per cent in October on the back of
the recent upward adjustment in administrative prices of electricity and water.”
BoG Maintains
Policy Rate
He said the BoG had once more maintained its policy
rate at 16 per cent.
The decision was based on the bank’s monetary
policy committee’s assessment that risks to inflation outlook were broadly
balanced.
BY Melvin Tarlue
