Although Ghana’s inflation rate has declined, the rate is still high, the World Bank Country Director, Robert Taliercio O’Brien, has said.
He attributed the recovery of the economy to the good policy position of the government.
The inflation rate for the month of July dropped to 20.9%, the Government Statistician Professor Samuel Annim announced on Wednesday, August 14.
This marks the fourth consecutive month of decline in the rate.
The drop represents a 2.1 percentage point decrease from June’s 23.0%, signalling a gradual easing of the economic pressures that intensified throughout 2023.
In July, food inflation stood at 21.5%, while non-food inflation was slightly lower at 20.5%. Interestingly, the inflation rate for imported items was recorded at 15.6%, significantly lower than the 23.3% observed for locally produced goods.
This sustained decline in inflation, which began in April 2024, indicates a steady cooling of price growth.
The World Bank Country Director said regarding tuis that “Inflation has been reduced, so it’s on a declining path, and it needs to keep declining. It’s still too high, but good progress is being made, thanks in part to the policy position of the government.”
He further indicated that the World Bank is optimistic about is debt restructuring.
“Ghana implemented the domestic debt restructuring in 2023 and reached an agreement under the G20 Common Framework with its official creditors,” Robert O’Brien stated.
He further explained that a Memorandum of Understanding on restructuring the official bilateral debt was achieved and is currently in progress.
“As of June of this year, the government announced an agreement in principle with the commercial bondholders, which is the third piece of the debt restructuring program. So again, very good progress, but more to do,” he added.
The World Bank official also commended government’s fiscal consolidation efforts, which have led to a significant reduction in public spending.
“We saw very important measures taken by the government to reduce expenditures last year, which resulted in a 7.9 percentage point decrease in spending,” he said, describing it as “a very significant effort” to get fiscal management back on track.
Despite the achievements, the World Bank cautioned that Ghana’s economic recovery is not yet complete.
“There’s more to do,” he told Joy News.
He further urged continued focus on sustaining the progress made so far while addressing the remaining challenges.