Inflation expected to reduce in coming days due to improved economic factors – Ofori-Atta

The Finance Minister, Ken Ofori-Atta, has stated that inflation is expected to reduce as some economic factors and indicators have shown some improvements.

According to him, the rise in the inflation rate for May 2023 can be attributed to the introduction of new taxes and utility price adjustments.

Therefore, it is expected that inflation could come down.

“Inflation has decelerated to 42.2% for the month of May 2023, down from 54.1% at the end of December 2022. The May inflation represents a 1ppt increase in the April 2023 inflation of 41.2%. The May Inflation was largely driven by Food Inflation of 51.8% (up from 48.7% in April) with Non-Food Inflation decelerating to 34.6% from 35.4% in April.

“The relative rise in inflation in May 2023 appears to reflect the pass-through effect of the utility price adjustments in April and the implementation of the new tax handles in May. We expect inflation to decelerate going forward,” he said during a press conference on June 18, 2023.

The Minister also added that the cedi’s depreciation has largely stabilized with a year-to-date depreciation rate of about 21.9% (as of Friday 16th June 2023), down from 50% in December 2023.

“The 91-Day T-Bill rate has declined to 20.6%, down from 35.5% at the end of 2022 with the country’s gross international reserves improved to US$5.7 billion (at the end of May 2023) after the disbursement of the first tranche of US$604 million following the approval of the IMF Programme,” the minister outlined.