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Dr. Ernest Addison, BoG Governor<\/strong><\/p>\n THE CENTRAL Bank on Monday announced that credit to the private sector is recovering to the pre-pandemic levels, reflecting commercial banks\u2019 portfolio rebalancing.<\/p>\n It said in year-on-year terms, private sector credit increased significantly by 33.7 percent in June 2022, compared with 6.8 percent in the same period of 2021.<\/p>\n \u201cIn spite of the sustained price pressures, private sector credit, in real terms, recorded a 3.0 percent growth. A year ago in June 2021, real private sector credit had contracted by 0.97 percent.<\/p>\n \u201cThe latest credit conditions survey of banks revealed tightened credit stance on loans to enterprises and households. Notwithstanding these tight credit conditions across the industry, banks\u2019 credit extension improved during the review period,\u201d Dr Ernest Addison, Governor and chairman of the Monetary Policy Committee said.<\/p>\n He said new advances to the economy broadened across the industry, with 20 out of 23 banks extending new credit.<\/p>\n \u201cTotal new advances as of June 2022 was GH\u00a224.6 billion (54.0 percent year-on-year growth), compared to GH\u00a215.9 billion (1.0 percent growth) recorded for the same period of 2021,\u201d the BoG Governor said.<\/p>\n He continued that results from the bank\u2019s latest confidence surveys conducted in June 2022 showed significant softening of business and consumer sentiments adding that \u201cWhile consumers felt less optimistic about future economic conditions, businesses were concerned about the impact of high cost of raw materials, rising labour costs, exchange rate volatility, and weak consumer demand.\u201d<\/p>\n These conditions adversely impacted business optimism and prospects. At the same time, the Purchasing Managers\u2019 Index (PMI), which provides information on inventory accumulation and new orders at the firm level, also declined.<\/p>\n Beyond the first quarter, the Bank of Ghana\u2019s high frequency indicators reflected further slowdown in economic activity, consistent with the recent GDP data.<\/p>\n \u201cThe updated Composite Index of Economic Activity (CIEA) recorded an annual growth of 1.7 percent in May 2022, compared to 2.5 percent in April 2022 and 5.0 percent in December 2021.<\/p>\n \u201cThe key growth drivers were exports, credit to the private sector, and tourist arrivals, while construction activities and industrial production contracted over the period.<\/p>\n \u201cThe pace of expansion in monetary aggregates moderated in the first half of 2022. Broad money supply (M2+) grew by 19.1 percent in June 2022, compared with 21.3 percent in the same period of last year,\u201d he said.<\/p>\n The Governor added that the slower growth was driven by a contraction in the Net Foreign Assets (NFA) of banks, which was partly offset by a significant expansion in Net Domestic Assets (NDA). Reserve money growth also slowed to 33.8 percent from 41.2 percent, recorded over the same comparative period.<\/p>\n \n\t<\/div>\n","protected":false},"excerpt":{"rendered":" \u00a0 Dr. Ernest Addison, BoG Governor THE CENTRAL Bank on Monday announced that credit to the private sector is recovering to the pre-pandemic levels, reflecting commercial banks\u2019 portfolio rebalancing. It said in year-on-year terms, private sector credit increased significantly by 33.7 percent in June 2022, compared with 6.8 percent in the same period of 2021. 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