Central Bank describes performance of Ghana economy in 2011 as “Good”

Amissah-Arthur - Governor of Bank of Ghana

The Bank of Ghana (BoG) has described the country’s economy in the year 2011 as a good one.

“I think it has been good,” the BoG governor Kwesi Amissah-Arthur told journalists in Accra December 21, 2011 when asked about the performance of the economy for the year 2011.

All the economic indicators have shown positive signs, he noted.

The bank’s Composite Index of Economic Activity (CIEA) cited during the governor’s Monetary Policy Committee (MPC) news conference, indicates that there has been continued momentum in the economic activity of the country.

“The CIEA recorded a growth of 6.4% between August and October 2011. On a year-on-year basis, the CIEA posted a growth of 18 per cent. The increase was reflected in growth in all the indicators of the Index,” said Amissah-Arthur.

Inflation remained within single-digit during the year. From 9.1% in January, it declined to 8.4% at the end of the third quarter but has since inched up to8.6% in November, he added.

Food Inflation which stood at 4.8% in January 2011, he said, declined to 4.4% by the end of November 2011 with non-food inflation also easing from 11.8% to11.1% over the same period.

“Core inflation, which measures underlying inflation, dropped from 8.1 percent in January 2011 to 7.5 percent in June 2011, but has since November 2011increased to 7.9 percent,” text of the governor’s speech says.

But the BoG’s latest Consumer Confidence Survey index for November 2011 showed a decline from 103.6 in September to 99.3.

It cited tick in inflation and pressures on the Cedi as factors contributing to the fall.

The central bank is expecting a single-digit inflation of 9% to end the year 2011.

Ghana is targeting an overall budget deficit of 4.1% of gross domestic product (GDP) in the 2012 fiscal year, Finance Minister Dr. Kwabena Duffuor told lawmakers November 16, 2011 when he read the 2012 budget statement.

The government last year (2010) set the 2011 fiscal budget deficit target of 5.1% of GDP.

According to the Minister, as at the end of 2008, the fiscal deficit on cash basis was 8.5% of GDP (14.5 percent of GDP – old series). “As at the end of September 2011, it had been reduced significantly to 2% of GDP,” he adds.

Dr Duffour said, for 2012 targets forecast “real non-oil GDP growth of 7.6%; real overall GDP growth of 9.4%; Average inflation of 8.7%; end-period inflation of 8.5%; and gross international reserves of not less than three months of import cover for goods and services.”

The Ghana Statistical Service (GSS) in October 2011 estimates the economy will grow 13.6% in 2011 as compared to the growth of 7.7% in 2010.

By Ekow Quandzie

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