BoG Governor confident inflation rate to remain within target band of 6% to 10%

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Governor of the Central Bank, Dr Ernest Addison, has expressed confidence in the headline inflation staying within the Bank’s target band of 6 to 10 percent for the remaining months of the year.

The confidence expressed by the Governor is despite recent upward trend in headline inflation rate from April this year when headline inflation stood at 8.5 percent from the 10.3 percent recorded in March.

The headline inflation reduced further to 7.5 percent at end-May 2021 but however, increased by 0.3 percentage points to 7.8 percent at end-June 2021.

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Inflation since June has continued on an elevated path reaching 9.7 percent at end-August 2021, marginally below the Central Bank’s 10 percent upper end of the target band.

“We expect inflation to continue to remain within the target band although we have have had some base trade effects with regards to some of the recent tax and petroleum price adjustments, but inflation continue to be anchored in our single digits band, ”stated the Governor.

Dr Ernest Addison made the assertion delivering the keynote address during the Africa Debate Summit, updating investors on he current happenings of Ghana’s economy.


Despite the optimism expressed by the Governor with regards to inflation remaining within the target band, a report by the SIC Brokerage firm on inflation indicate that the outlook for headline inflation for the remaining months of 2021 is negative.

According to the Brokerage firm, inflation rate is expected to inch higher on a number of factors such as higher import inflation as the Cedi depreciates against the major trading currencies such as the dollar going into the Christmas festivities.

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“Our outlook for inflation remains negative. We also  expect inflation for imported goods to edge higher  in the coming month and towards end of 2021 as the Ghana Cedi depreciates against major trading  currencies. With festive season fast approaching,  we expect this trend to continue,” affirmed the brokerage firm in its inflation report.

According to the Brokerage firm and as previously affirmed by the Ghana Statistical Service (GSS), Year-on-Year inflation rate as measured by CPI was 9.7% in August 2021, a rise compared to the 9.0% recorded in July 2021, representing a Month-on-Month inflation increase of 0.3%.

Inflation outlook negative; to trend upwards Inflation to continue upward trend as outlook remains negative for the rest of 2021 inf BoG Governor confident inflation rate to remain within target band of 6% to 10% inf

Also, Year-on-Year food inflation exceeded non-food inflation by 2.2% with more than three-quarters of the rate of inflation recorded in July 2021 being contributed by Housing, Water, Electricity and Gas (15.2%), Transport (12.8%) and Food and Non-alcoholic Beverages (10.9%).

Inflation for locally produced items was 10.3% while inflation for imported items was at 8.1%.

Non-food inflation went up marginally to 8.7% in August 2021 from 8.6% in July 2021. Food inflation also trended higher to record 10.9% inflation from 9.7% in July 2021.

Northern Region and Greater Accra Region recorded the  highest overall inflation of 14.6% and 12.8% respectively. The  Eastern region recorded the least inflation of 3.0% at the  regional level.

Higher inflation rates is expected to translate into higher costs of living for Ghanaians, hence the need for the Bank to ensure that it remains within its target band of 6 to 10 percent.

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