Govt to miss end year Inflation target by 0.7% - EIU predicts

 

 

Adnan Adams Mohammed

 

The government is likely to miss its end of the year inflation target by 0.7 percent according to the latest Economist Intelligence Unit (EIU) report.

 

The EIU, in reviewing Ghana's economy projected that the country's inflation would end the year at 8.7%. This is 0.7% higher than the finance ministry’s projection of 8 percent in the 2020 budget statement.

 

This means the prices of goods and services will largely remain same, whilst interest rates stay low.

 

“Despite a sharp downturn in economic activity, we expect annual average inflation to edge up in 2020, to 8.7% (from 8.5% in 2019), reflecting ongoing currency weakness and upward pressure on the prices of some goods as a result of pandemic-related restrictions and shortages”, it said in its review of the Ghanaian economy.

 

Further, it said inflation will then moderate in 2021, to 8%, helped by a slower pace of cedi depreciation, although this will be partly offset by the impact on imported inflation of a pick-up in global commodity prices.

 

From 2022, it, however, expects inflation to rise.

 

It believes that the Bank of Ghana will keep inflation within the official target band, but with relatively slow fiscal consolidation, robust domestic demand and ongoing currency depreciation.

 

According to EIU, inflation will remain elevated, at an annual average of 8.8% in 2022-24.

 

Year-on-year inflation remained unchanged at 7.8% in March 2020.

 

According to figures by the Ghana Statistical Service, month-on-month inflation between February 2020 and March 2020 was, however, 0.8%.