The International Monetary Fund (IMF) is predicting an end-year inflation rate of 11.6% for Ghana, according to its World Economic Outlook Report.
This is coming on the back of the marginal drop of September 2020 inflation to a rate of 10.4%.
The Bretton Wood institution’s forecast will be higher than the Bank of Ghana’s inflation target of 8+-2%.
It, however, forecasts single-digit inflation of 8.7% for 2021. Its single-digit inflation projection for the country last year was achieved.
The Ghana Statistical Service cited some reduction in prices of foodstuff as the driver of the slight fall in the inflation rate in the month of September.
Inflation is a very important economic indicator because of its effect on interest rates and cost of borrowing.
For instance, the Bank of Ghana’s inflation targeting framework’s objective is to maintain stability in the general level of prices.
The IMF said inflation is expected to remain low this year globally.
In the emerging market and developing economy, inflation is projected at 5% this year, below the historical average for the group.
The country’s inflation rate is far higher than that of neighboring Ivory Coast and Togo whose inflation rates are a little above 1.0%.
Nigeria, however, has an inflation rate slightly higher than Ghana but interest rates are lower than that of the country.
September 2020 Inflation
Inflation fell marginally by 0.1% in September 2020 to record a rate of 10.4%.
According to figures from the Ghana Statistical Service, the slight drop was influenced by a reduction in some prices of foodstuff.
Month-on-month inflation between August 2020 and September 2020 was, however, -0.2%. Last month, the month-on-month inflation was also negative (- 0.4%).
On average month-on-month inflation between April and July 2020 was 0.9% and in the six months prior to COVID-19 month-on-month inflation rate was 0.7%.