MPC Press Release - August 2007
The latest data show that headline inflation, based on the Consumer Price Index (CPI) eased to 10.1 percent in July from 10.7 percent in June, after increases in the two preceding months to 11.0 percent in May; returning the inflation rate to the level recorded at the end of the first quarter of the year (10.2 percent in March 2007). Non-food price inflation also turned in at 10.1 percent in July, compared with 11.3 percent in June, while food price inflation was at 10.2 percent in July edging up from 9.9 percent in June.
The main core measure of inflation used by the Bank of Ghana to monitor underlying inflation pressures in the economy which is defined to exclude energy and utilities charges from the CPI basket declined by 0.5 percentage points during the second quarter of the year. It tracked inflation at 8.6 percent as at June 2007; and 8.1 percent in July 2007.
The Bank’s Business and Consumer Confidence indicators show generally positive assessment of macroeconomic conditions and prospects. However, there are signs that the intensity and duration of the energy situation has weighed down on business confidence and expectations, during the second quarter of 2007.
Available information from the Bank of Ghana’s Composite Index of Economic Activity (CIEA) at the end of the second quarter of 2007 show an increase of 7.0 points (2.4 percent) over the March 2007 level; and 17.1 percent in year-on-year terms, lower than the trend growth of 21.1 percent. The components contributing to the increasing pace of activity during the second quarter were cement sales, domestic VAT collections, employment, and commercial bank credit. There were slowdowns in port activities, exports and imports, and electricity consumption from the first quarter.
Financial data released by listed companies for the period ended June 2007 showed significant growth in turnover and net profits, and reduction in operating expenses relative to the preceding year’s results. The improved performance was generally broad based, cutting across companies in Agriculture, Food and Beverages, and the Distribution sectors of the economy, except for Manufacturing where cost of operations turned out higher.
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