Bank of Ghana's latest confidence surveys conducted in April 2021 showed some dip in both consumer and business sentiments.
Consumer confidence dipped slightly on account of recent increases in petroleum prices at the pump, new taxes, and transportation fares.
The latest monetary policy committee (MPC) report by the Central Bank, which made this known, said this followed on the heels of the bank's updated Composite Index of Economic Activity (CIEA) which registered a strong annual growth of 26.8 per cent in March 2021, compared to a contraction by 1.9 per cent in the corresponding period of 2020.
It said the key drivers of economic activity during the period were domestic consumption (proxied by VAT collection), construction activities, international trading activities, resumption of industrial production activities and air-passenger arrivals.
The report said in a similar direction, the optimism of businesses observed at the last MPC round also softened at this MPC round on concerns that the imposition of new taxes as announced in the 2021 Budget Statement and the ongoing electricity maintenance management programme would adversely impact operational costs in the short-term. Businesses however, expressed optimism about their company and industry prospects.
The latest Ghana Purchasers Managers Index, which gauges the rate of inventory accumulation by managers of private sector firms and measures dynamics in economic activity, also improved in April 2021.
Recent price developments show that headline inflation dropped sharply from 10.3 per cent in March 2021 to 8.5 per cent in April, almost back to pre-pandemic levels and within the medium-term target band of 8±2 percent.
The decline in the April inflation was driven by lower food prices and base drift effects. Food inflation dipped markedly to 6.5 per cent in April from 8.8 per cent in March, while Non-food inflation rose to 10.2 per cent from 10.0 per cent over the same comparative periods, on account of increases in ex-pump prices, and housing prices.