The statement read by Central Bank Governor, Mr. Buah Saidy, revealed that headline inflation rose to 18.4% in July 2023, up from 17.8% in June 2023. He added that the tariff adjustments have impacted consumer price index and the pass through effect continues to push prices up.
“On the positive side, the stability of the exchange rate is putting a damper on the prices of imported goods and services. Food inflation increased to 24.9% in June 2023, from 23.5% in June 2022. Bread and Cereals, Fish, Fruits, Vegetables, and imported food subcategories were among the key drivers of the uptick in food inflation. Non-food inflation declined marginally from 11.5% in June 2023 to 11.3% in July 2023, thanks largely to a decline in the transport price index.”
Governor Saidy went on to note that the Committee observed that there were encouraging signs of improving global economic conditions, with a relatively brighter growth prospect and declining inflation. However, he said, this outlook is still clouded by geopolitical uncertainties, and volatility in commodity prices, especially for food and energy. He added that the easing of global supply chain bottlenecks may continue to dampen food and energy prices.
On the domestic economy, he said: “The Committee projects the post pandemic recovery momentum to continue, with a healthy real GDP growth of over 5.0% for 2023. Growth will continue to be supported by the recovery in tourism activity, public and private sector consumption, and investments, as well as better harvest expected this cropping season.”
He informed that the foreign exchange market remains relatively stable notwithstanding demand pressures, adding that the Central Bank continues to maintain a comfortable level of external reserves.
“However, 7 challenges in the balance of payments, as reflected in the continued increase in the current account deficit, necessitate our ongoing attention and focus. Domestic price pressures continue to be a critical concern. The headline inflation rate of 18.4% in July 2023 surpasses our tolerable level, and the outlook is unfavorable.”
