Economists and the Central Bank in Sierra Leone are anticipating a staggering 59.8 percent inflation rate in January 2024, following a notable 3.2 percentage point surge in September.
The Central Bank’s forecasting accuracy, highlighted in the September 2023 Monetary Policy Report, validated earlier predictions, with a slight deviation in August attributed to increased fuel and public transportation prices.
High-risk scenarios outlined by the Central Bank’s experts point to potential inflationary pressures from energy prices, exchange rates, food index, and Money Supply exceeding initial projections.
Conversely, low-risk scenarios suggest that a reduction in government expenditure could contribute to inflation decline.
Despite efforts, inflation remains a persistent challenge, with analysts identifying upward risks in fuel and transportation costs, exchange rate depreciation, monetary expansion, rising prices of imported commodities, and heightened inflation expectations.
The Monetary Policy Committee (MPC) advocates for a contractionary monetary policy in the coming quarters and emphasizes coordinated efforts with the fiscal authority to address the fiscal deficit.
This collaboration aims to subside reserve money growth, aligning with the goal of achieving low and stable prices. Policy reforms targeting real sector activity are stressed as crucial to address economic concerns in Sierra Leone.
Source: Awoko
