Government says there are growing signs of Macro stability as inflation, which was on an upward trend in the second half of the year on account of the strong inflation expectations that were built up in 2008, has assumed a downward trend in the last four consecutive months.

This was contained in a press statement issued by Abdul Hakim Ahmed, Media Liaison, Ministry Of Finance & Economic Planning.

Read below the full statement issued by Ministry Of Finance & Economic Planning.

PRESS RELEASE

INFLATION DECLINES AND CEDI APPRECIATES AGAIN: SIGNS OF MACRO STABILITY

Inflation, which was on an upward trend in the second half of the year on account of the strong inflation expectations that were built up in 2008, has assumed a downward trend in the last four consecutive months. The consumer price inflation rose to 20.5% in March this year from 18% in December 2008. The rate peaked at 20.7% in June and thereafter dropped to 19.6% in August, 18.4% in September, 18% in October and further to 16.92% in November in response to the macroeconomic and fiscal stabilization measures of the government supported by a good food harvest.

The macroeconomic and fiscal stabilization measures implemented by the government have established sound economic fundamentals in the country, led to a significant reduction in both the fiscal and external deficits, and sharply built-up the stock of the country’s gross foreign reserves. Together, these have also had significant positive impact on the Cedi.

The depreciation of the Cedi observed in the first half of the year which was caused by the larger than expected twin deficits of 2008, depletion of foreign reserves, and uncertainties in the domestic and global financial markets, was reversed during the second half of the year. The rate of depreciation of the cedi/dollar rate at the interbank market declined sharply from 5.4% in January this year to 0.9% in July. Since then, the Cedi has appreciated in each month against the dollar: 1.7% in August, 0.7% in September, 0.6% in October and 0.7% in November.

The appreciation of the Cedi has contributed significantly in lowering inflation, causing the consumer price inflation to drop in four consecutive months. And the outlook is that the consumer price inflation will drop even further in the month of December and beyond as the appreciating Cedi continues to keep imported inflation low. For the first time in many years, therefore, Ghanaians will experience stable prices and appreciating Cedi in a Christmas period: a clear demonstration of “Building a Better Ghana” for all.

END

ISSUED BY ABDUL HAKIM AHMED, MEDIA LIAISON MINISTRY OF FINANCE & ECONOMIC PLANNING