Consumer and business confidence in the Ghanaian economy continues to soar in spite of the difficult macroeconomic challenges facing the country, the Bank of Ghana (BoG) has said.

Governor of the BoG, Dr Ernest Addison who disclosed this in a press statement on the 98th meeting of the Monetary Policy Committee (MPC) of the BoG on Monday to announce a new monetary policy rate, said results from the Bank’s latest confidence surveys conducted in December 2020 showed improvements in both the consumer and business confidence.

The MPC, after three days of data crunching, analysis and forecasting, maintained the policy rate at 14.5 per cent, attributing their stance to “risks to inflation and growth,” the eighth consecutive time since the MPC reduced the policy rate by 150 basis points from 16 per cent in September 2019 to the current 14.5 per cent.

Dr Addison said consumer confidence remained firm at pre-lockdown levels reflecting optimism about current economic conditions following the gradual lifting of the COVID-related restrictions.

“Business confidence improved significantly, reaching pre-lockdown levels, for the first time, as businesses met short-term company targets and expressed positive sentiments about growth prospects,” the Governor said.

He indicated that the BoG’s updated Composite Index of Economic Activity (CIEA) recorded an annual growth of 11.9 per cent in November 2020, compared with 3.4 per cent growth a year ago.

Dr Addison said the key drivers of economic activity during the period were construction, port activity, imports, manufacturing, and credit to the private sector.

Touching on some macroeconomic issues such as inflation, the Governor said inflation had begun to pick up.

Dr Addison disclosed that two readings since the last MPC meeting indicated that headline inflation eased from 10.1 per cent in October to 9.8 per cent in November and then, subsequently rose to 10.4 per cent in December 2020.

He said the inflation uptick in December was mainly driven by food inflation, which moved up to 14.1 per cent from 11.7 per cent in November.

“Underlying inflation pressures inched up marginally in line with the headline inflation trends. The Bank’s core inflation measure, which excludes energy and utility, went up marginally, while inflation expectations of businesses and consumers moderated. Financial sector inflation expectations inched up marginally,” said the Governor.

On debt, Dr Addison said the elevated fiscal path, as a result of the huge financial investment being made by the government to contain the spread of the coronavirus pandemic and minimise its impact on the economy, had impacted the stock of public debt.

He said the country’s total public debt stock had risen to 74.4 per cent of Gross Domestic Product (GDP) (GH¢286.9 billion) at the end of November 2020 compared with 62.4 per cent of GDP (GH¢218.2 billion) at the end of December 2019.

Of the total debt stock, Dr Addison said domestic debt was GH¢147.3 billion (38.2 percent of GDP), while external debt was GH¢139.6 billion (36.2 per cent of GDP).