SEPTEMBER MEETING OF THE BANK OF GHANA MPC

 

MPC-Press-Release-September-2021

Summary-of-Economic-Financial-Data-September-2021-1

 

AT THE END OF SEPTEMBER, THE MONETARY POLICY COMMITTEE [MPC] OF THE BANK OF GHANA HELD ITS MOST RECENT MEETING. THIS MEETING PAINTED A MIXED PICTURE OF THE ECONOMIC SITUATION IN GHANA. AS USUAL, YOU CAN DOWNLOAD THE MPC PRESS RELEASE AND THE RECENT SUMMARY OF ECONOMIC AND FINANCIAL DATA FROM THE TOP OF THIS ARTICLE.

THE MPC STARTS WITH A BRIEF ANALYSIS OF THE GLOBAL ECONOMY. HERE THE MPC SEES A CONTINUATION OF THE RECOVERY PROCESS, ALBEIT WITH SONE RISKS.THESE RISKS ARE MAINLY CONNECTED WITH THE INSECURITY CONCERNING THE COVID19 PANDEMIC, ESPECIALLY THE DELTA VARIANT. NEVERTHELESS, THE MPC COUNTS ON THE GLOBAL ECONOMIC RECOVERY TO CONTINUE. TOGETHER WITH MOST CENTRAL BANKS AND POLITICIANS WORLDWIDE, THE MPC LOOKS AT THE INFLATION RISK AS BEING TEMPORARY.

CONNECTED WITH THE GLOBAL SITUATION, THE MPC SEES A MIXED PICTURE LOCALLY. THIS IS VERY WELL REFLECTED BY THE SENTIMENTS: THE BUSINESS SENTIMENT WENT SOUTHWARDS, BASED MAINLY ON SUPPLY CHAIN PROBLEMS. THIS IS IN LINE WITH THE GLOBAL OUTLOOK. ON THE OTHER HAMD, THE CONSUMER SENTIMENT SHOWS A POSITIVE DEVELOPMENT. WE CAN EXPECT THAT IN THE NEXT SUMMARY THE SENTIMENTS MIGHT REVERSE. USUALLY, THE CONSUMER SENTIMENT FOLLOWS THE BUSINESS SENTIMENT.

THE MOST POSITIVE SITUATION IS SURELY THAT OF THE BANKING SECTOR. MOST OF THE INDICATORS FOR THIS SECTOR POINTS IN THE FOR THE BANKS RIGHT DIRECTION. LET US HOPE THAT THE BANKS WILL SOON PASS THIS POSITIVE DEVELOPMENT OVER TO THEIR CUSTOMERS. SIGNS FOR A START OF THIS ARE ALREADY OCCURRING, ALTHOUGH THE NON-PERFORMING LOANS RATIO INCREASED.

THE MOST WORRYING SITUATION APPEAR IN THE FISCAL SECTOR, AS THE GOVERNMENT HAS NOT ACHIEVED MOST OF THE TARGETS. BUT, AS THE MPC POINTS OUT, THERE ARE SOME SIGNS OF SUNRAYS WITHIN THE FISCAL CLOUDS. THIS, ALTHOUGH THE GOVERNMENT’S DEBTS INCREASED AGAIN.

TWO MORE SECTOR WITH A LITTLE NEGATIVE TREND ARE THE TRADE SURPLUS AND THE INFLATION RATE. THE TRADE SURPLUS DECREASED BY AROUND 40 PERCENT, CAUSED BY LOWER OIL EXPORTS AND MORE IMPORTS.THE INFLATION RATE INCREASED MAINLY BY HIGHER FOOD PRICES. ON THE OTHER HAND, THE MPC EXPECTS FOOD PRICE INFLATION TO DECREASE IN AUTUMN, WHEN THE HARVEST SEASON IS GOOD. THE MPC ALSO EXPECTS THE TRADE SURPLUS TO INCREASE AGAIN, AS THE ECONOMIC ACTIVITIES IN THE COUNTRY SHOW FURTHER POSITIVE SIGNS

WEIGHING ALL THE POSITIVE AND NEGATIVE INFLUENCES ON THE ECONOMY, THE MPC LEFT THE POLICY RATE AT 13.5 PERCENT.

 

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