Monetary Policy
MPC Press Release - January 2006
Tuesday, 31 January 2006 00:00

The latest Consumer Price Index (CPI) numbers point to steadily diminishing inflationary pressures. Monthly price changes in the third and fourth quarters of 2005; which came in at –0.1 and 0.1 percent respectively, averaged the lowest in the last six years. Food prices recorded an average monthly change of –0.2 and 0.0 percent in the third and fourth quarters of 2005 while non-food prices rose by 0.4 and 0.3 percent per month.

Consequently, headline inflation, which jumped to a peak of 16.7 percent in March (following the petroleum price adjustment) eased to 15.3 percent in November, and ended at 14.8 percent in December 2005. The Bank of Ghana’s measures of core inflation all declined through the third and fourth quarters of 2005, with three of the main measures recording inflation in the range of 5.3 and 9.9 percent by December 2005.

The Bank of Ghana’s Composite Index of Economic Activity (CIEA) indicates that economic activity in the real sector of the economy increased during the fourth quarter by 3.8 percent over the September 2005 level and 27.4 percent over the November 2004 level, raising growth above the trend annual rate of 21.0 percent recorded over the past four years.

  • Real sector indicators such as manufacturing sales, credit to the private sector, imports, and tourist arrivals showed an increase in economic activity. Some 20,800 persons were also added to the number of private sector contributors to SSNIT and job creation as measured by advertised vacancies has been robust.
  • The Bank of Ghana Survey of Business Confidence indicates that while the overall assessment of economic prospects remains strongly positive, there was a softening of business confidence with specific regard to growth in profits and investment in the fourth quarter relative to the preceding quarters of 2005. 

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