Single Digit Inflation To Be Achieved Q2 2026 – BOG

Dr. Ernest Addison

 

Ghana is likely to achieve its single-digit inflation target in the second quarter of 2026 instead of the first quarter projected earlier.

Governor of the Bank of Ghana, Dr. Ernest Addison who disclosed this at a press briefing when he announced the new policy rate at the bank square in Accra said the target is dependent on the economic policy agenda of the government.

“Our forecasters are saying that instead of reaching the single digit by the first quarter of 2026, the forecast suggests that we will do that in the second quarter of 2026. Of course, all of that is predicated on the economic policy agenda, which is yet to be crafted”.

“So we have to make some assumptions that we will continue on the fiscal consolidation path, and the budget that will be crafted will respect the parameters under the IMF program and given that those parameters are respected, one can confidently say that the inflation profile would be close to what forecasters are saying.”

He said inflation for 2024 started with about 23.5 and went up to almost 25 percent at the end of March due to changes in the exchange rate, pressure on the currency as well as the Central bank’s aggressive target to build reserves in the first quarter of the year.

“That contributed to the slight increase there to 25%. Inflation went down to 20 percent in August, and then we saw the gradual increase to 23.8. So it’s been going in different directions”.
According to the governor, all those challenges could be attributed significantly to food prices in terms of supply, transport fares and some other changes coupled with the 2024 election where the role of sentiments and expectations which could not be quantified also drove the exchange rate.

He said that the slight difference between inflationary figures at the beginning of the year and close of year could therefore not be attributed to the non performance of the monetary policies but structural given that the currency ended better at the end of the year than the headline inflation.

“The problem that we saw was mainly a structural problem, as you identified, coming in from the food problem and then the issue of the climate change issues that have impacted food production in our country”.

Dr. Addison further stated in view of the IMF programme, the Monetary Policy consultative clause of the bank would discuss further policies the Bank of Ghana would put in place to achieve the single-digit trajectory it’s looking forward to.

He said among the reason why the policy rate is been maintained 27% is also enable the bank ‘get a better sense of the policy agenda’.

By Ebenezer K. Amponsah

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