Finance Minister Lauds 8.5 Per Cent Inflation Rate

Finance and Economic Planning Minister, Dr Kwabena Duffuor has welcome the drop in inflation rate to 8.5 per cent, the lowest ever under any government in the nation’s recent economic history.

Inflation rate for December 2010 has dropped to a record 8.5 per cent, the Ghana Statistical Service (GSS) has said in a newsletter released today in a meeting with the press.

“The steady decline in the inflation rate is attributed principally to the continued monetary restraint, prudent fiscal management by the government, good agricultural policies (causing good food harvest) and stable commodity prices,” Dr Duffuor explains.

He dismissed claims from some quarters that the drop in the inflation rate is attributed to lack of spending on the part of the government, adding that the Mills administration has met all its financial obligations and has even moved to clear a substantial part of the huge arrears to contractors left behind by the previous government.

The Finance Minister said that “the drop in the rate of inflation to 8.5 per cent bears testimony to the stability of the economy which the government has been pursuing since January 2009. Now that the economy has stabilized, fiscal year 2011 and the medium term will see a strong stimulation of growth and job creation.”

“We’ll pursue a broad based and job-creation economic growth agenda to remove Ghanaians out of poverty,” Dr Duffuor added.

Inflation reached 18.1% in December 2008 as a result of excessive spending by the previous government. This led to a build-up of strong inflationary pressures in the economy, which caused the inflation rate to continue to rise in the first half of 2009, reaching an all time high of 20.7% in June. The inflation was also fuelled by the weakened domestic currency, which lost more than 30% of its value against the dollar between July 2008 and June 2009.

Since June 2009, however, the inflation rate has been on a steady decline, reaching 16% in December 2009. By June 2010, the inflation rate had dropped to 9.5% and subsequently to 8.5 per cent in December, 2010.

ISSUED BY ABDUL HAKIM AHMED, MEDIA LIAISON MINISTRY OF FINANCE AND ECONOMIC PLANNING

THE NEWS EDITOR