We will achieve 8% end-year inflation target – Ofori-Atta

Finance Minister, Ken Ofori-Atta, has assured that government is on course to achieve its 8 percent end-year inflation target set for the 2019 fiscal year.

Despite inflation averaging 9.8 percent in 2018 and projected by the Economic Intelligence Unit (EIU) to rise to 11 percent this year, due to pressure on the local currency, the Finance Minister is optimistic the set target will be achieved.

“Inflation, which reflects the price of goods and services, was reduced from 15.4 percent in 2016 to single digits, with a projected 8 percent by end 2019. We are on course,” Atta said Finance Minister Ken Ofori-Atta.

Inflation for March increased by 0.1 percentage point from the 9.2 percent recorded in February 2019 to 9.3 percent. The Ghana Statistical Service cited the stress on the local currency and imported food items for the marginal increase.

Speaking at a forum organised recently in Accra by the Danquah Institute, he said despite the difficult economic situation in 2017, government has been able to reduce a stifling fiscal deficit from 7.3 percent of GDP in 2016 to 4.2 percent in 2018 – and has also successfully exited the IMF bailout programme.

The Finance Minister sympathised with the concerns of bank depositors across the country when the current government made its decision to embark on a radical banking clean-up exercise last year.

He admitted the Nana Akufo-Addo administration had braced itself for a backlash, with the full knowledge that “it was certainly not meant to deliver us a quick win”.

He said the banking sector reforms are imperative in protecting the hard-earned funds of millions of Ghanaians. “Upon assuming office, the Akufo-Addo administration was confronted with a harsh truth: the livelihoods of millions of Ghanaian depositors were at stake, as the economy’s banking sector headed for imminent collapse.

“We could not do what the others did by pretending all was well. We couldn’t stand by and watch a few people enrich themselves off the misfortune of over 1.5 million hardworking Ghanaian depositors who had saved up for a rainy day,” he said.

He added: “Our decision to go ahead with the clean-up was a difficult one, and we braced ourselves for a bumpy ride. But we have pulled through with your understanding and patience.

“Today, we can say with confidence that our banks are in much better shape than they were a couple of years ago. They [banks] are better capitalised with more robust governance structures, smaller bad loans portfolios, and are much safer for depositors.”