AfDB projects inflation to remain above 44.7 percent until 2024
The African Development Bank (AfDB) is projecting that Ghana’s inflation rate will anchor at 44.7 percent for year ending 2023.
According to the AfDB, interest rate is also to remain above 25%.
This projection is coming on the back of a three-month continuous increase in inflation to 43.1% in July 2023.
This projection is contained in the AfDB West Africa Economic Outlook Report.
“Within the West Africa region, inflation is projected to be highest in Ghana (45%), Nigeria (17%), Sierra Leone (27%) and the Gambia (12%). Except Nigeria, local currencies in the three other countries experienced double digit depreciation in 2022. This is expected to continue in the medium term”, the report disclosed.
However, the Bank maintains that Inflation is however expected to decline to 20.4% in 2024.
The AfDB further warned that a hike in the Bank of Ghana’s policy rate may do more harm than good to growth prospects.
“Therefore, amid already high policy rates (e.g., policy rate of 18% in Nigeria, 29% in Ghana and 19% in Sierra Leone), further rate hikes might do more harm than good to growth prospects”.
To address the current economic crisis in the country the Bank suggests: “Possible mitigation measures include international financial assistance, enhanced fiscal consolidation, economic diversification, and private sector growth.”
Source: Ghana Business
