Government’s inflation target of 9.50 per cent for this year is likely to be missed according to the latest Bank of Ghana Inflation Outlook.

This means that the cost of borrowing will go up further.

According to the Central Bank, inflation is likely to remain above the target by the end of 2014.

But it’s expected to return to the target band next year barring any risks.

The main assumptions of these forecasts are the likely pass through effects of the faster pace of depreciation of the Cedi, the slower than anticipated fiscal consolidation and the continued utility and petroleum price adjustments.

It however warned that a further depreciation of the Cedi may have direct implications on prices despite stable crude oil prices.

The regulator of the banking industry said the subsequent tightening of the policy rate by the Monetary Policy Committee at the February 2014 meeting re-affirms its commitment to price stability.

The policy rate was adjusted by 200 basis points to 18 percent the last time the MPC met at the beginning of February but the MPC said the tight monetary policy will slow down growth on the whole.