Global oil prices could go up further – Prof Quartey backs BoG’s 14% policy rate

Executive Director of the Institute of Statistical, Social, and Economic Research (ISSER), Professor Peter Quartey

Economist Professor Peter Quartey has backed the Bank of Ghana (BoG)’s decision to maintain its policy rate at 14%, citing rising global oil prices and persistent inflationary threats.

He said the decision was appropriate given the uncertainty surrounding the global economy.

“Well, it’s certainly a good move because if you look at the threats to our macro economy, you realise global oil prices have been going up and are likely to go up,” he said.

Professor Quartey said the outlook for oil prices remains uncertain, creating further risks for Ghana’s economy.

“We’re not sure what the near end is going to look like,” he said.

He also pointed to other pressures facing consumers and businesses, including higher utility charges and fuel prices at the pump.

“And inflationary threats are there, and you’ve seen utility increases, we’ve seen increases in fuel prices at the pump, etc.,” he said.

Against this backdrop, he described the decision to keep the policy rate unchanged as appropriate.

“So it is just laudable, or it’s just ideal that you maintain the rate,” he said.

Professor Quartey, however, acknowledged that the Bank of Ghana could have considered raising the rate in response to the global economic pressures.

“It’s quite a difficult one. I mean, if you really want to look at what is happening globally, you may want to hike the rate,” he said.

But he cautioned that a rate hike could create additional difficulties for businesses by increasing the cost of doing business.

“But that would not be ideal for businesses, would not be ideal for the cost of doing business,” he said.

He said the Bank of Ghana’s current approach allows it to monitor developments before making its next decision.

“And therefore, the bank is taking the approach of basically to watch the space a little bit and see how it comes out, and then we’ll take a decision,” he said.

Professor Quartey ultimately endorsed the decision to maintain the rate.

“But I I think it’s certainly in the right direction,” he said.

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