By Christian Akorlie
ACCRA (Reuters) -Ghana’s central bank left its main interest rate unchanged on Monday, saying that inflation was expected to start falling again and that detailed talks on monetary policy were difficult before the new government publishes its economic policy plans.
It was the second meeting in a row that the Bank of Ghana kept its policy rate at 27.00%.
Backed by a $3 billion loan programme from the International Monetary Fund, the West African gold and cocoa producer is emerging from its worst economic crisis in a generation, having defaulted on most of its external borrowing in December 2022.
Bank of Ghana Governor Ernest Addison told a news conference that inflation remained elevated, “largely driven by food price movements, especially in the last quarter of the year.”
“While the inflation outturn for the year 2024 deviated from target, it is expected that the disinflation process will resume, contingent on renewed efforts at fiscal consolidation, which is anticipated in the new administration’s economic policies,” he told reporters.
Ghana’s consumer inflation rose in December to 23.8% in annual terms, the highest rate in eight months.
The central bank targets an inflation rate of 8%, with a margin of error of 2 percentage points either side of that.
Addison said the bank’s latest forecast showed it would take longer for inflation to return within the 6%-10% range.
President John Dramani Mahama, who staged a political comeback in December, has pledged to rapidly address growing discontent by boosting the economy and creating jobs. But his administration is yet to formally publish its economic policy plans or deliver a budget statement.
Ghana’s parliament passed a provisional budget in early January to avert an unprecedented government shutdown.
(Reporting by Christian Akorlie; Additional reporting by Bate Felix; Writing by Anait Miridzhanian; Editing by Alexander Winning and Hugh Lawson)
