The Bank of Ghana has noted that during the first half of this year, although household spending growth stabilized, business fixed investment and exports remained weak and inflation continued to run below the Federal Open Market Committee’s (FOMC) 2.00% objective.
The BoG said in the semi-annual report for the Petroleum Holding Fund (PHF) and the Ghana Petroleum Funds (GPFs) for 2020 that indicators of longer term inflation expectations were little changed on balance. Real residential investment weakened significantly, with consumer spending rebounding modestly to end H1 at -6.10 % after a sharp decline of -19.90%.
In Europe, the ECB kept policy interest rates unchanged at -0.50% for deposit facility, 0.00% for main refinancing operations and 0.25% for the marginal lending facility. They however introduced a series of fiscal, monetary and macro-financial measures to combat and provide an effective near-term backstop to the serious risks that the coronavirus pandemic poses to the bloc.
“In H1 2020, the COVID-19 virus and transmission mitigation measures taken, severely disrupted economic activity in the U.S from its previous moderate pace of growth in H2 2019.
“The outlook for U.S. economic growth is projected to decline by 8% in 2020 with a rebound of 4.5% expected in 2021.
“The outlook remained cloudy with some downside risks resulting from the uncertainty related to the economic effects of the coronavirus pandemic.
“The FOMC adopted a dovish posture as interest rates were kept unchanged at the effective lower bound (ELB) range of 0-0.25% with the provision of a large and timely fiscal response during H2 2019 to cushion the impact of slowing growth, a surge in job losses and muted inflation.
“The labour market remained adversely affected, with the unemployment rate ending H1 2020 at 11.10%, an improvement from a historically high rate of 14.70 % in April 2020, highlighting the historic surge in job losses during this period with a complete recovery not expected by the end of the year.”