Ghana’s ongoing economic woes appear to have worsened in July, with inflation now approaching 31.7%, according to Ghana’s statistics agency Ghana Statistics. The country’s inflation rate has risen by nearly 2%, as the local currency is reported to have depreciated by as much as 30% since the beginning of the year.
Economist proposes installation of currency board
Year-on-year inflation in the West African country rose to 31.7% in July, according to the latest data from the Ghana Statistics Service (GSS). The latest inflation rate was nearly 2% higher than the 29.8% recorded in June, the data showed.
Ghana’s latest official inflation rate was confirmed to be the highest in 19 years, while a report showed the country’s currency, the cedi, has lost more than 30 percent of its value since the beginning of the year. Ghana’s currency devaluation has since prompted Steve Hanke — a Johns Hopkins economics professor who estimates Ghana’s real inflation rate is twice as high — to call for an immediate currency board.
Ghana wants more from IMF
Meanwhile, another report by Bloomberg suggests that the government of President Nana Akufo-Addo is now seeking $3 billion from the International Monetary Fund (IMF). That figure is double the $1.5 billion the government initially sought when it announced its intention to borrow again from the global lender.
As previously reported by Bitcoin.com News, Ghana’s deteriorating economic situation and reports of growing difficulties with street protests prompted the Akufo-Addo government to reverse its decision not to seek a bailout from the International Monetary Fund.
The Bloomberg report also hinted that the Ghanaian government hopes the IMF bailout will help restore investor confidence in its economy. However, regarding bailout talks between Ghana and the IMF, the report quoted an unnamed source as saying:
With negotiations on the plan now underway, it is too early to comment on the final form the plan will take. Extended credit to low-income countries is the IMF’s main vehicle for medium-term support to countries facing chronic balance-of-payments problems, similar to Ghana. The duration of this arrangement is three to four years and can be extended to five years.
However, the source said the IMF board will have the final say on how much money Ghana actually receives.
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