11 July 2014

Ghana: Monetary Policy Committee (MPC) On External Sector Developments

press release

Merchandise trade deficit for January to May 2014, according to provisional estimates, contracted sharply on the back of a significant decline in imports, outpacing the slowdown in exports, Dr Henry Kofi Akpenamawu Wampah, Governor of the Bank of Ghana (BoG), has disclosed. Dr Wampah, who was addressing a news conference in Accra on Wednesday after the 60th meeting of the Monetary Policy Committee (MPC), said total merchandise exports amounted to US$5.9 billion, down by 7.5 per cent from the US$6.3 billion recorded in the same period of 2013.

The decline in merchandise exports, he said, was mainly due to lower earnings in gold and crude oil, with Gold exports amounting to US$1.8 billion as both gold prices and volumes fell by 17 and 7 per cent year-on-year, respectivel--comparing with gold export earnings of US$2.3 billion in the corresponding period of 2013. He said Cocoa beans and products amounted to US$1.5 billion, compared with US$1.3 billion for 2013, representing a growth of 14.4 per cent while Crude oil exports declined to US$1.6 billion from US$1.7 billion in 2013 on the back of lower production volumes which fell by 8 per cent although prices inched up marginally by 1.3 per cent.

However, he said, Non-traditional export earnings (including timber and other minerals) remained unchanged at US$1 billion. On imports, Dr Wampah said, total imports declined to US$6 billion for the period under review, down by 17.8 per cent, compared with US$7.3 billion in same period of 2013.

The decline, he said, was attributable to a 19.7 per cent year-on-year decline in Non-oil imports to US$4.6 billion while Oil imports fell by 11 per cent to US$1.4 billion, as a result of which trade deficit narrowed significantly to US$156.6 million from January to May 2014, compared with a deficit of US$990.8 million in the corresponding period of 2013. On remittances, he said total remittances to individuals increased to US$692 million in January to May 2014 from US$652 million in the same period of 2013 while developments in the foreign exchange market indicated that the cedi cumulatively depreciated by 26.7 percent against the US dollar in the first half of 2014, compared with 3.4 per cent depreciation same period last year.

Dr Wampah said Gross International Reserves (GIR) at end-June 2014 was US$4.5 billion, corresponding to 2.5 months of import cover, compared with US$5.6 billion at end-December 2013-- a development which partly reflected the seasonality in foreign exchange flows during the year.

Source: ISD (G.D. Zaney)

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