The Minister of State at the Finance Ministry Abena Osei Asare has assured that government remains committed to fiscal prudence and discipline with its expenditure in the coming months to help sustain the slowdown in inflation.

She disclosed this to Joy Business on the side-lines of the AFREXIM Bank Annual Meetings in Nassua Bahamas.

She made the pledge after inflation for May 2024 declined to 23.1 percent from the 25.0 percent recorded in April 2024.

“Government is committed to working with the Bank of Ghana to ensure that things do not get out of hand, in the area of slowing inflation to hit the end of year target”, she said.

She stated that government is collaborating with the Bank of Ghana to support the monetary policies of the central bank with prudent fiscal policies to achieve price stability.

“Some measures that the Bank of Ghana has implemented are already getting the required support and we are also committed on the fiscal side to consolidate the gains made”, she reiterated. 

“We have all seen how high inflation rate impacted badly on the economy and we are committed to making sure that we don’t get there again” she added.

 Inflation rate developments

Inflation rate dropped from 25 percent in April 2024 to 23.1 percent in May this year, the lowest in 26 months.

According to the Ghana Statistical Service, the slowdown in the May Inflation rate can be linked to favourable developments on the food component of inflation.

The Bank of Ghana is projecting inflation to end the year at a lower band of 13 percent and a higher band of 17 percent.

Madam Osei Asare noted that, government’s intervention in the agriculture sector is beginning to show in the reduction of food inflation.

She pledged that government will do everything on the fiscal side to ensure that inflation declines further.

Debt deal with bilateral creditors

Madam Osei Asare revealed that government will now be turning its attention to individual countries after getting a deal with bilateral creditors.

“We should not forget that we now have a broad framework at the Official Creditor Committee level. That is good to guide our engagement with each bilateral country”, she said.

Describing the development as a positive step, Madam Osei Asare said government is expecting more donor partners to support the country.

“We expect more donor partners to react positively with some fresh funding to support the recovery of Ghana’s economy, and also some of the projects that have stalled because of these negotiations”.