Bank of Ghana Governor, Dr Johnson Pandit Asiama, has warned that prolonged disruptions linked to the conflict in the Middle East could create fresh inflationary pressures in Ghana through higher energy prices.
Dr Asiama said global developments, particularly any prolonged disruption to the Strait of Hormuz, remain among the biggest risks to Ghana’s inflation outlook.
Speaking at the 131st Monetary Policy Committee press briefing, he said the Bank had already observed an uptick in core inflation, signalling emerging underlying price pressures.
He explained that while the Bank’s current projections indicate that inflation should continue to decline and remain within the medium-term target band, the outlook remains vulnerable to external shocks.
“We continue to see renewed volatility arising from developments in the Middle East,” Dr Asiama said, noting that such developments could affect Ghana through higher energy prices and related channels.
According to the Governor, a prolonged disruption to the Strait of Hormuz could have significant implications for global energy prices and, in turn, increase inflationary pressures in Ghana.
He also identified adjustments in utility prices as another major upside risk to the inflation outlook.
Dr Asiama stressed that the central bank would remain vigilant and respond appropriately should emerging risks begin to threaten the progress made in bringing inflation under control.
The warning comes as Ghana continues to navigate external economic shocks while pursuing a disinflation process.
Despite the risks, the Governor maintained that the Bank currently expects inflation to continue moving downward and remain within its medium-term target range.
He said the focus of monetary policy would be to ensure that emerging risks are contained while keeping inflation on a sustainable path towards the Bank’s target.
Ghana|Atinkaonline.com|Mavis Fantevi