Ghanaian Finance Minister Seth Terkper said food inflation will slow this year as rains bring better harvests and a natural gas project bolsters economic growth in the fourth quarter.
“We are coming out of the recession, the power situation is improving, cocoa is doing very well and gold prices have stabilized,” Terkper said yesterday in an interview in the capital, Accra. Ghana’s first-quarter growth of 6.7 percent from a year earlier was below target though “better than IMF predictions,” he said.
The central bank of Africa’s second-largest gold producer has said it is ready to act to tame price increases that are at a four-year high. The International Monetary Fund said economic growth will ease this year as investors worry about the plunge in the cedi, power shortages and inflation.
Inflation quickened to 14.8 percent in May and produce prices rose 33.1 percent. Food and beverage prices rose 8 percent in May, according to the Ghana Statistical Service.
Moody’s Investors Service cut Ghana’s credit rating to B2 last week from B1, citing a rising debt ratio, increasing financing costs and vulnerability to external shocks. The 30 percent decline in the currency against the dollar this year is boosting the price of everything from sugar to fuel. The electricity and fuel shortages plaguing the country will ease once Ghana’s gas processing plant begins operations later this year, Terkper said.
The finance ministry is reviewing first-half revenue to decide whether it needs to submit a mid-term budget in July or August, Terkper said.
“The gas project is coming up and will give us reliable and cheaper power to boost productivity,” he said.