The Minister of State at the Finance Ministry Abena Osei Asare has assured that government remains committed to fiscal prudence and discipline with its expenditure in the coming months to help sustain the slowdown in inflation.
She disclosed this to Joy Business on the side-lines of the AFREXIM Bank Annual Meetings in Nassua Bahamas.
She made the pledge after inflation for May 2024 declined to 23.1 percent from the 25.0 percent recorded in April 2024.
“Government is committed to working with the Bank of Ghana to ensure that things do not get out of hand, in the area of slowing inflation to hit the end of year target”, she said.
She mentioned that the government is working together with the Bank of Ghana to reinforce the monetary policies of the central bank through responsible fiscal policies to attain price stability.
“Some measures that the Bank of Ghana has implemented are already getting the required support and we are also committed on the fiscal side to consolidate the gains made”, she reiterated.
“We have all seen how high inflation rate impacted badly on the economy and we are committed to making sure that we don’t get there again” she added.
Inflation rate developments
The inflation rate decreased from 25 percent in April 2024 to 23.1 percent in May of this year, marking the lowest level in 26 months.
According to the Ghana Statistical Service, the moderation in May’s inflation rate can be attributed to favorable developments in the food component of inflation.
The Bank of Ghana forecasts that inflation will range between 13 percent and 17 percent by the end of the year.
Madam Osei Asare highlighted that government’s initiatives in the agriculture sector are beginning to yield results in reducing food inflation.
She assured that the government is fully committed to taking all necessary fiscal measures to further decrease inflation.
Debt deal with bilateral creditors
Madam Osei Asare disclosed that the government will shift its focus to individual countries following an agreement reached with bilateral creditors.
“We should not forget that we now have a broad framework at the Official Creditor Committee level. That is good to guide our engagement with each bilateral country”, she said.
Madam Osei Asare characterized the development as a positive stride, expressing government’s anticipation of additional support from donor partners for the country.
“We expect more donor partners to react positively with some fresh funding to support the recovery of Ghana’s economy, and also some of the projects that have stalled because of these negotiations”.