Bank of Ghana predicts decline in inflation by end of 2024, aims for 6-10% by 2025

The Bank of Ghana anticipates a further decline in headline inflation to a range of 13-17% by the end of 2024, gradually trending back to the medium-term target range of 6-10% by 2025, barring unanticipated shocks.

According to the January 2024 Monetary Policy Report, the disinflation process is expected to continue, with clear indications that the current macroeconomic framework, supported

Read full articleby the International Monetary Fund-Economic Credit Facility program, is yielding positive results.

The report notes that potential risks to the inflation outlook are linked to geopolitical tensions and potential spillovers to commodities markets, especially international crude oil prices. However, the Bank of Ghana emphasizes that all measures of core inflation are on a downward trend, indicating a continued easing of underlying inflationary pressures.

Improved forex inflows from IMF-ECF disbursements, the cocoa syndicated loan, and expected funding from the World Bank are anticipated to enhance foreign exchange inflows.

Additionally, initiatives such as the Gold for Reserves program, repatriation of foreign exchange from mining and oil companies, and a reduction in debt service payments are expected to support reserve build-up and exchange rate stability, contributing to the disinflation process.