The Bank of Ghana has denied claims by the World Bank that it is responsible for the increasing rate of inflation in the country.
According to the Central Bank, the rising inflation in the country cannot be laid on their doorstep.
Whiles announcing a new monetary policy increment on Thursday, a 200 basis points increase to 24.5 per cent, the Governor of the Bank of Ghana, Dr Ernest Addison, explained that the rising inflation rate is not a result of the delay in tightening the monetary policy rate.
Dr. Addison noted that Ghana is amongst the first countries to tighten its monetary policy rate, therefore, the World Bank’s assertion that it delayed in doing so, hence the rise in inflation, is not acceptable.
He, therefore, indicated that he is hopeful about the measures being put in place to salvage the economy, as far as inflation is concerned.
“They’re of the other view that the monetary policy tightening is the way to go. Except that we’re late by their assessment, which I also disagree with because if would recollect, we started this policy tightening as far back as November 2021. It wasn’t in January that we got locked out of the market,” Dr Ernest Addison said.
The World Bank stated in a recent report that the failure of the Central Bank to tighten its monetary policy on time is the cause of Ghana’s rising inflation which is affecting the economy.
The report also added that the country’s debt to GDP is expected to hit 104% by the end of the year.
This means if Ghana’s total productivity is measured over a one-year period, it cannot cater for its external debts; as a deficit of some 4% would be required.
The report further noted that the depreciation of the Cedi as well as the increasing rate of inflation and the government’s fiscal deficits are to blame for the prevailing economic situation.