The policy mix under the IMF-supported PC-PEG programme characterised by stringent fiscal and monetary policies to ease off aggregate demand pressures and contain the rising inflation "is gradually yielding positive results", Bank of Ghana Governor Ernest Addison has said. 

Speaking at the Chartered Institute of Bankers' Governor's Day, Dr Addison said the cumulative increases in the policy rate by 1,550 basis points since January 2022, supported by the relative exchange rate stability, have supported the disinflation process. 

From the peak of 54.1 per cent in December 2022, headline inflation has declined to 35.2 per cent in October 2023.

Non-food inflation has also "declined sharply" by more than 20 per cent during the period, broadly aligned with the monetary policy stance, he reported.

In addition, he said the "underlying inflation pressures are easing, evidenced by the downward trend in all the core inflation measures". Ultimately, Dr Addison said the goal is to gradually re-anchor inflation back within the medium-term target of 8±2 per cent.  

Furthermore, he said the country’s external sector position has improved in the first three quarters of the year with a lower overall balance of payments deficit outturn. 

"This was on the back of a current account surplus, reflecting higher gold export receipts and import compression, as well as lower outflows from the income accounts due to the external debt standstill". 

He noted that the lower balance of payments deficit, the domestic gold purchase programme, inflows from the mining and oil sectors, as well as the liquidation of some short-term external liabilities, have "contributed to increased reserve buffers and provided some stability in the foreign exchange market".   

He said despite the "tight policy framework, growth conditions are gradually improving". 

In the first half of 2023, Dr Addison said GDP growth averaged 3.2 per cent. 

Also, he said high frequency economic indicators monitored by the bank have continued to improve, "signalling the likelihood of outperforming the GDP growth projection of 1.5 per cent for the year. These developments provide evidence that the policy mix under the IMF Extended Credit Facility is beginning to yield results".