Ghana’s ongoing economic woes appeared to worsen in July after data from the country’s statistical agency, Ghana Statistical Service, suggested that the inflation rate is now nearly 31.7%. The nearly 2% increase in the country’s inflation rate comes at a time when the local currency is reported to have depreciated by as much as 30% since the start of the year.
Economist Recommends Installation of Currency Board
According to the latest data from Ghana Statistical Service (GSS), the West African nation’s year-on-year inflation rate for July rose to 31.7%. According to data, this inflation rate was nearly 2 percentage points higher than that of 29.8% recorded in June.
Confirmation of Ghana’s latest official inflation, which is said to be the highest in 19 years, coincided with a report suggesting the country’s currency, the cedi, has now depreciated by more than 30% since the beginning of the year. The currency’s depreciation has since prompted Steve Hanke — the Johns Hopkins economics professor who estimates Ghana’s real inflation rate to be two times higher — to call for the immediate installation of a currency board.
Ghana Demands More from IMF
Meanwhile, another Bloomberg report has suggested that President Nana Akufo-Addo’s government is now seeking $3 billion from the International Monetary Fund (IMF). This figure represents twice the amount that the government sought at $1.5 billion when it first announced its intent to borrow again from the global lender.
As previously reported by Bitcoin.com News, Ghana’s worsening economic situation and reports of street protests against the growing hardships had prompted Akufo-Addo’s government to reverse its decision not to seek a bailout from the IMF.
Bloomberg reported also that Ghanaian officials hope an IMF bailout will restore investor confidence. The Bloomberg report did not mention a source regarding the talks between Ghanaian and IMF bailouts. He said that:
Since negotiations for the program are starting now, it’s too early to comment on the final form the program will take. The Extended Credit Facility for low-income countries is the Fund’s main tool for medium-term support for countries facing protracted balance of payments problems, similar to Ghana’s. An agreement like this can last between 3-4 years and is extendable up to 5 years.
According to the source, Ghana will receive the maximum amount of IMF funding.
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