People walk past the Bank of Ghana in Accra, Ghana. Photo by: REUTERS / Zohra Bensemra

The rollout of COVID-19 vaccination in Ghana will power a faster recovery of the country’s economy, Ghana’s central bank said Monday.

Addressing the media after the 100th Monetary Policy Committee (MPC) meeting, Ernest Addison, the Governor of the Bank of Ghana, said underlying inflation pressures had been easing and growth prospects improving over the two months of March and April due to the easing of COVID-19 restrictions as infections slowed and vaccinations began.

“The steady rollout of the vaccination program, leading to a projected growth in the mining sector, recovery in the industry, and improved output in the services sector, should work their way in supporting a faster closure of output gap in the medium term,” said Addison.

In March and April, the governor said domestic economic activities “picked up strongly, evidenced by the high-frequency economic indicators.”

The key drivers of economic activities during the period, he said were domestic consumption, construction activities, international trading, resumption of international production activities, and air-passenger arrivals.

Coupled with these, the governor said the easing of the underlying pressures of inflation over the period also led to a sharp fall in inflation to 8.5 percent in April from 10.3 percent a month earlier, which has combined with the improved growth prospects to favor the easing of the bank’s benchmark lending rate to induce growth.

“Under these circumstances, the MPC decided to lower the policy rate by 100 basis points to 13.5 percent from 14.5 percent. The committee will continue to monitor price developments and take appropriate actions, where necessary to contain all potential pressures to the inflation outlook,” added the governor.

Ghana’s rate of economic growth contracted to 0.4 percent in 2020 due to the impact of restrictions put in place to contain the outbreak of the COVID-19 pandemic in the country.

The International Monetary Fund, however, projected earlier in May a rebound of the country’s economy to a 4.8 percentage growth in 2021 powered by the roll-out of vaccinations and a recovery in the extractive sector. Enditem

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