Ghana Commercial Bank

As the Bank of Ghana announces a cut in the policy rate from 18 per cent to 17 per cent, the Monetary Policy Committee says it stands ready to take the appropriate policy measures to address any potential threats to the disinflation path.

Addressing journalists in Accra, the Governor of the central bank governor, Dr. Ernest Addison said economic activity remains strong as non-oil growth continued to show signs of a rebound following the slowdown in the last few years.

“We have however observed some moderation in economic activity in the first quarter of 2018 as measured by leading indicators monitored by the Bank. For instance, the Bank’s Composite Index of Economic Activity (CIEA) recorded a 2.3 per cent year-on-year growth in the first quarter of 2018, compared with 4.5 per cent over the same period last year. However, the latest business and consumer confidence surveys show continued optimism based on improving macroeconomic fundamentals and realization of expectations, despite lingering concerns on employment opportunities by consumers,” he said.

According to the governor, the pace of growth in key monetary aggregates moderated as aggregate demand pressures remained subdued. Annual growth in broad money supply (including foreign currency deposits) slowed to 17.5 percent in April 2018 from 26.6 percent last year.

On fiscal operations, he said the provisional March 2018 data indicates that budget execution is in line with programme, but early indications from April banking data underscores the need for ramping up revenue mobilization to match the corresponding expenditure flows.

“Provisional data for the first quarter of 2018 show that revenue and grants amounted to GH¢9.4 billion (3.9 per cent of GDP), representing 86.6 per cent of target. Total expenditures amounted to GH¢12.9 billion (5.2 per cent of GDP) and 94.3 per cent of the target for the period. These developments resulted in an overall cash deficit of 1.3 per cent of GDP, in line with the target for the first quarter of 2018 and same for the corresponding period of 2017,” he said.