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Results from the Bank of Ghana’s latest confidence surveys, conducted in October 2019, pointed to improved business sentiments, Governor of the Bank of Ghana, Dr Ernest Addison has said.
He further stated that business confidence has rebounded, due mainly to favourable company and industry prospects, positive growth outlook and declining lending rates. Consumer sentiments, on the other hand, remained broadly unchanged from the previous survey.
Developments in monetary aggregates are consistent with the trends in aggregate demand. Growth in broad money (M2+) remained strong during the year. In year-on-year terms, growth in M2+ was 16.3 per cent in October 2019. Reserve money also expanded in the review period.
Growth in reserve money went up by 26.1 per cent, compared with 4.3 per cent over the same comparative period.
Commercial banks’ credit to the private sector has also continued to improve. Annual growth in private sector credit was 14.0 per cent in October 2019, compared with 11.4 per cent for the same period of 2018. In real terms, private sector credit expanded by 5.9 per cent compared with 1.7 per cent over the same comparative period. The latest credit conditions survey conducted by the
Bank in October 2019 pointed to an ease in the credit stance on loans to households. However, credit stance on loans to enterprises tightened, reflecting continuous efforts by the commercial banks to safeguard the quality of their loan portfolio through improved due diligence and credit risk management.
The three readings of inflation since the release of the rebased Consumer Price Index by the Ghana Statistical Service show that inflation has remained below its central path of 8 per cent.
Headline inflation declined from 7.8 per cent in August 2019 to 7.6 per cent in September and has since inched up to 7.7 per cent in October on the back of the recent upward adjustment in administrative prices of electricity and water.
Looking ahead, inflation is projected to stay within the medium-term target of 8±2 per cent over the forecast horizon. Inflation expectations for businesses, consumers, and the financial sector, appear to be well-anchored within single digits despite a slight pick-up in the Bank’s measure of core inflation.
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