Dr. Ernest Addison, the Governor of the Bank of Ghana (BoG), has stated that the central bank anticipates achieving a single-digit inflation rate by the first quarter of 2026. This projection hinges on the economic policies and programs to be implemented in 2025 under the administration of John Mahama.

Speaking on PM Express Business Edition with host George Wiafe, Dr. Addison elaborated on the measures taken by the BoG to address inflation and stabilize the economy.

Inflation Trends in 2024

Initially, the BoG forecasted the inflation rate for the end of 2024 to be 15 %. However, this target was later adjusted to 18 %. By November 2024, inflation rose slightly to 23 per%cent, compared to 22.1 % in October.

Dr. Addison attributed the expected decline in inflation to the central bank’s monetary policy measures, specifically its inflation-targeting framework.

“The Bank of Ghana’s efforts to manage rising price levels through targeted policies will result in inflation slowing down significantly in 2025,” he assured.

Dr. Addison projected the inflation rate to drop to 15 % by the end of 2025, down from the current 23 %.

He acknowledged that uncertainties surrounding the 2024 elections and negative economic sentiments during that period contributed to the inflationary pressures and the depreciation of the cedi. Despite these challenges, the economic situation showed improvement in the last quarter of 2024, reflecting the resilience of the central bank’s policies.

“We had expected the rapid decline in inflation witnessed in 2023 to continue into 2024, but this did not materialize,” Dr. Addison noted.

Inflation History and Cedi Performance

Inflation peaked at 54.1 percent in December 2022, marking a 22-year high. However, the rate began to decline throughout 2023, thanks to policy interventions by the BoG.

Dr. Addison expressed optimism about the continued stability of the cedi in 2025, emphasizing its critical role in controlling inflation and stabilizing prices. “There is a clear connection between the performance of the cedi and inflation rates,” he explained.

He also linked the cedi’s challenges to the debt exchange program under the International Monetary Fund (IMF) initiative, which had ripple effects on the currency and price levels.

The governor reiterated the importance of maintaining robust monetary policies to sustain the current economic stability and achieve long-term inflation targets.

Source: TheDotNews