Wednesday, April 24, 2019

Canada maintains rate but drops reference to rate hikes

     Canada's central bank left its benchmark target for the overnight unchanged for the fourth time in a row and turned even more dovish by dropping any references to the need for further rate hikes and signaling it may even consider cutting interest rates.
      The Bank of Canada (BOC), which has maintained its key rate at 1.75 percent since October 2018 when it raised it for the 5th time since July 2017, said economic growth has slowed even more than it forecast in January and "an accommodative policy interest rate continues to be warranted."
      "We will continue to evaluate the appropriate degree of monetary policy accommodation as new data arrive," BOC said in its statement, adding it was keeping a close eye on household spending, oil markets and global trade policy to see how factors that are weighing on growth dissipate.
      In January the BOC lowered its growth forecast and then in March it began its shift toward a more dovish policy stance - a shift also seen in the U.S. and Europe - by saying there was  increased uncertainty about the timing of further rate hikes in light of slowing economic growth.
      "Ongoing uncertainty related to trade conflicts has undermined business sentiment and activity, contributing to a synchronous slowdown across many countries," BOC said.
     Canada's economy slowed in the second half of last year and growth in the first half of this year is now expected to be even slower than anticipated in January as last year's fall in oil prices and transportation limits had curbed investment and exports in the energy sector while investment and exports in other sectors had been affected by trade policy uncertainty and the global economic slowdown.
     Gross domestic product growth in the fourth quarter of 2018 fell to only 0.1 percent from the third quarter for annual growth of 1.6 percent, down from 1.9 percent in the third quarter.
     But GDP grew 0.3 percent in January from December after two straight months of decline and BOC expects growth to pick up in the second quarter, helped by the decision by major central banks to slow down the pace of monetary policy normalization, which has improved financial conditions and sentiment in financial markets.
      "Our belief is that the slowdown of growth to a below-potential pace will prove to be temporary," BOC Governor Stephen Poloz said.
     In its latest monetary policy report, BOC lowered its forecast for 2019 economic growth to 1.2 percent from January's forecast of 1.7 percent, and its 2018 estimate to 1.8 percent from 2.0 percent.
     The forecast for 2020 was unchanged at 2.1 percent and for 2021 growth is seen at 2.0 percent.  
     Canada's headline inflation rate has ticked up in the last three months to 1.9 percent in March along with core inflation, which also rose to 1.6 percent.
     BOC raised its forecast for 2019 headline inflation to 1.9 percent from January's 1.7 percent forecast and down from 2.3 percent in 2018. For 2020 and 2021 inflation is seen at BOC's target of 2.0 percent.
     A further illustration of the weakening outlook came from the central bank's lowering of its estimate of the neutral rate by 25 basis points to 2.25 - 3.25 percent from its 2018 estimate. The neutral rate is the rate that is consistent with economic activity at its potential level and inflation around the BOC's 2.0 percent target.
     In response to the central bank's policy statement, the Canadian dollar dropped 0.5 percent to 1.351 per U.S. dollar but later bounced back to 1.349 to be up 0.8 percent since the start of this year.

Sunday, April 21, 2019

This week in monetary policy: Botswana, Canada, Paraguay, Fiji, Japan, Indonesia, Sweden, Turkey, Ukraine, Mozambique, Russia, Azerbaijan & Colombia

    This week - April 21 through April 27 - central banks from 13 countries or jurisdictions are scheduled to decide on monetary policy: Botswana, Canada, Paraguay, Fiji, Japan, Indonesia, Sweden, Turkey, Ukraine, Mozambique, Russia, Azerbaijan and Colombia.
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.
    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

WEEK 17
APR 21 - APR 27, 2019:
COUNTRY                   DATE                     RATE                LATEST                    YTD              1 YR AGO
BOTSWANA24-Apr5.00%005.00%
CANADA24-Apr1.75%001.25%
PARAGUAY24-Apr4.75%-25-505.25%
FIJI25-Apr0.50%000.50%
JAPAN25-Apr-0.10%00-0.10%
INDONESIA25-Apr6.00%004.25%
SWEDEN25-Apr-0.25%00-0.50%
TURKEY25-Apr24.00%008.00%
UKRAINE25-Apr18.00%0017.00%
MOZAMBIQUE25-Apr14.25%0016.50%
RUSSIA26-Apr7.75%007.25%
AZERBAIJAN26-Apr9.00%-25-7511.00%
COLOMBIA26-Apr4.25%004.25%

Saturday, April 20, 2019

Uzbekistan holds rate to lower inflation and expectations

    Uzbekistan's central bank left its key refinancing rate unchanged at 16.0 percent, saying this moderately tight monetary policy would continue to curb inflation and consolidate the declining trend of inflationary expectations.
     The Central Bank of the Republic of Uzbekistan (CBU), which has maintained its rate since a 200 basis point hike in September 2018, said it retained its forecast for inflation this year of 13.5-15.5 percent but would lower it for the first half of the year if it was confident inflation would decelerate.
     Inflation in land-locked Uzbekistan, east of the Caspian Sea, was near the lower border of the central bank's forecast in the first quarter of this year at 13.6 percent, lower than expected, with the main forces emanating from continued economic reforms, including an increase in energy tariffs for businesses in November 2018, an expansion in the number of firms paying value-added-tax (VAT) and a slight weakening of the national currency, the som.
      Inflation in the second and third quarters of this year is is expected to be close to last year. In 2018 and 2017 inflation averaged 14.3 percent and 14.4 percent, respectively.
    In the fourth quarter of this year the central bank expects a decline in inflation, partly due to the comparison with the fourth quarter of 2018, and inflation should approach the lower boundary of its inflation forecast.
     Inflationary expectations by businesses and the public in the medium term remain higher than for the short term, showing some concern by respondents about a rise in prices, CBU said.
     The exchange rate of the som has been depreciating gradually this year, after a sharp fall in September last year, and was trading around 8,455 to the U.S. dollar, down 1.4 percent this year.
     Uzbekistan's economy is in the midst of major economic reforms begun in 2016, with reforms so far including liberalization of foreign exchange, tax reform and an upgrade in the quality and availability of economic statistics.
     Last week the central bank said it was implementing three major projects to upgrade the payment system, which in a few months will allow the interbank payment system to function 24 hours, 7 days a week in contrast to the current system which doesn't permit financial transactions after 5 p.m. local time and on the weekends and holidays.
     Economic activity in the first quarter of this year was in line with CBU's forecast, with the growth of credit in som slowing to 8.6 percent from 16.7 percent in the first quarter of last year.
     In March the International Monetary Fund (IMF) said excessive credit growth - mainly funded by the government - was a major risk to macroeconomic stability as rapid growth had helped finance a surge in capital imports and bolstered investment in housing and infrastructure following decades of underinvestment.
     "Given persistent inflationary pressure, the monetary stance needs to remain tight," IMF said last month, noting CBU aimed to bring inflation back to single digits and to facilitate the move to inflation targeting a new central bank law should provide CBU will sufficient independence to conduct its policies effectively.
     The IMF expects growth in Uzbekistan to pick up to 5.5 percent this year, from 5.1 percent in 2018, and then 6.0 percent in 2020 and 2021. Despite lower commodity prices and slowing external demand, strong investment and private consumption should underpin growth.
     IMF forecast inflation will hover around 15 percent this year, reflecting the delayed impact of energy price hikes for businesses in November last year, robust wage growth and projected increases in VAT collections as the number of firms paying VAT has risen significantly.
     IMF forecast inflation will average 15.6 percent this year and then decelerate to 12.4 percent in 2020 and 9.1 percent in 2021.

     www.CentralBankNews.info

Thursday, April 18, 2019

Credit to non-bank financial firms continues to grow-BIS

     The rapid growth of credit to non-bank financial institutions (NBFIs) since the global financial crises continued in the fourth quarter of 2018 when total worldwide cross-border bank claims grew only 1.0 percent, according to the Bank for International Settlements (BIS).
      After growing in 2016, global cross-border lending was largely steady in the last 2 years as higher lending to borrowers from advanced economies in 2018 was offset by a decline in lending to borrowers from emerging and developing economies, and offshore centers, BIS said in its latest release of international banking statistics for the end of 2018.
      Total global cross-border claims grew by $134 billion, or 1.0 percent year-on-year, during the fourth quarter of last year to an outstanding amount of $29 trillion, propelled by an 8 percent rise in claims on NBFIs, short-hand for an vast number of firms that provide financial services but do not have a full banking license and do not accept customer deposits.
      One of the effects of the global financial crises was that banking regulators tightened their supervision of major banks, forcing them to retreat from some riskier financing operations.
     Into this breach, stepped non-bank financial firms, such as insurance companies, specialized lenders, or institutional investors such as pension funds and brokerage firms.
      Between end-2015 and end-2018 cross-border claims on NBFIs grew by an annual pace of 8 percent in stark contrast to 0 percent growth in lending to banks and only 2 percent growth in lending to non-financial borrowers.
     Another illustration of the shrinking role of banks is that cross-border claims on banks fell by an annual 1 percent by end-2018 while claims on non-banks was up by nearly 5 percent, data from BIS, know as the central banks' bank, showed.
    The bulk of credit to NBFIs, nearly 80 percent, is focused on a small number of jurisdictions, with nearly half of the total global stock of $6 trillion in claims against borrowers in the US (24 percent), the euro area (23 percent), the Cayman Islands (18 percent) and the UK (14 percent).
      After rising sharply in 2016 and 2017, lending to emerging and developing economies slowed last year, especially to borrowers in developing Europe, while lending to Latin American revived.
     Overall claims on emerging market and developing economies slowed from 9 percent growth at the end of 2017 to 3 percent by the end of 2018, with roughly half of the $30 billion in claims in the fourth quarter going to borrowers in developing Asia and Pacific.
     Claims on Asia and Pacific rose $15 billion in the fourth quarter, bringing annual growth to 5 percent, with claims on China up $9 billion, the Philippines by $4 billion, Indonesia by $3 billion and Thailand by $2 billion.
     In contrast, cross-border lending to Taiwan fell by $11 billion, Swiss-based BIS said.

     Click here to read BIS international banking statistics at end-December 2018

     www.CentralBankNews.info


   

Monday, April 15, 2019

Kazakhstan cuts rate 25 bps, inflation expectations ease

     Kazakhstan's central bank lowered its base rate by 25 basis points to 9.0 percent, the first change in since a rate hike in October 2018, saying this cut should help keep inflation within the target corridor in 2019 and 2010 while maintaining economic growth.
     The National Bank of Kazakhstan (NBK) said future decisions about the base rate will depend on how inflation evolves as compared with its forecast and expectations for 2020.
     Today's policy easing comes after Kazakhstan's new president, Kassym-Jomart Tokayev, on April 12 ordered the central bank to find ways to lower banks' lending rates, according to Reuters.
      Tokayev, former speaker of the country's upper house, was named interim head of state until an election on June 9 following President Nursultan Nazarbayev's surprise resignation in March after almost 30 years in office.
      Nazarbayev, 78, led oil-rich Kazakhstan since 1989 when it was still part of the Soviet Union and was then elected president in 1991 and re-elected in successive elections, most recently in 2015.
      In February Nazarbayev accepted the resignation of NBK's chairman, Daniyar Akishev, and nominated cabinet minister Erbolat Dossaev, 48, as his replacement as part of a broader reshuffling of the cabinet.
     The change in NBK leadership followed Nazarbayev's call on the central bank and the government cabinet to boost economic growth to 5 percent this year from an estimated 4.1 percent in 2018.
      Inflation in Kazakhstan was steady at 4.8 percent in March and February, within NBK's target corridor of 4.0-6.0 percent, and the central bank noted a slowdown in inflation in its major trading partners as well as higher commodity prices, including oil prices.
      However, NBK said inflation expectations had continued to decline and this should have a beneficial effect on stabilizing inflation in the future.
      In NBK's quarterly forecast from March, inflation expectations 12 months ahead were 4.5 percent, with the inflation trajectory revised downwards from the November-December forecast.
      By 2020 some inflationary risks were possible from the waning impact of lower tariffs on regulated services, continued growth in consumer demand from fiscal stimulus and the gradual elimination of the output gap by the end of third quarter of 2020, the inflation report said.
     Domestic demand in Kazakhstan expanded 9.4 percent in the first two months of this year on an annual basis, helped by higher income and a 13.5 percent rise in consumer loans.
     In its inflation report NBK forecast that economic growth in 2019-2020 would slow to below 4.0 percent, around its potential, with domestic demand the key driver.
     In the fourth quarter of last year, Kazakhstan's gross domestic product grew an unchanged 4.1 percent year-on-year from the third quarter.

     www.CentralBankNews.info
   
 

Saturday, April 13, 2019

This week in monetary policy: Kazakhstan, South Korea, Tajikistan and Uzbekistan

    This week - April 14 through April 20 - central banks from 4 countries or jurisdictions are scheduled to decide on monetary policy: Kazakhstan, South Korea, Tajikistan and Uzbekistan.
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.
    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

WEEK 16
APR 14 - APR 20, 2019:
COUNTRY                   DATE                     RATE                LATEST                    YTD              1 YR AGO
KAZAKHSTAN15-Apr9.25%009.25%
SOUTH KOREA18-Apr1.75%001.50%
TAJIKISTAN18-Apr14.00%0014.00%
UZBEKISTAN20-Apr16.00%0014.00%

Wednesday, April 10, 2019

ECB maintains rates as uncertainties dampen sentiment

    The European Central Bank (ECB) maintained its key interest rates and guidance for rates to "remain at their present levels at least through the end of 2019" as economic data in the last month confirms growth remains sluggish while the persistence of geopolitical uncertainties, the threat of projectionism and vulnerabilities in emerging markets is dampening sentiment.
     The ECB, the central bank for the 19 members of the European Union (EU) that use the euro currency, also confirmed it will continue to invest principal payments from its stock of 2.6 trillion euros of securities "for an extended period of time past the date when we start raising the key ECB interest rates" along with its commitment of standing ready to adjust all monetary instruments to insure inflation moves toward its target of close to, but below, 2 percent.
     Last month the ECB turned surprisingly dovish as it became clear weak economic activity in late 2018 was continuing this year.
     It pushed back the time frame for any rate hike to 2020 from end-2019 and launched a new series of targeted longer-term refinancing operations (TLTRO-III) as it believed "an ample degree of monetary accommodation remains necessary" to keep easy financing conditions and boost growth.
     The ECB began cutting interest rates in November 2011 and in June 2014 it launched the first round of TLTROs which differ from normal short-term market operations by providing low cost loans to banks for periods of up to 4 years. 
     By March 2016 the euro area economy and inflation continued to remain weak and the ECB then cut its benchmark refinancing rate to the current level of 0 percent while the deposit rate was cut to minus 0.40 percent and the marginal lending rate to 0.25 percent.
      That month the ECB also began using large-scale asset purchases - known as quantitative easing - just as the Federal Reserve, the Bank of England, the Bank of Japan and Sweden's Riksbank. 
     In December 2018 the ECB took the first step toward normalizing its monetary policy by ending these bond purchases.
     ECB President Mario Draghi said details, including the pricing, of the third series of low-cost loans will be released at one of the next meetings of the ECB Governing Council and the central bank is also weighing whether the continuation of negative interest requires any measures to ease the side effects on banks' abilities to lend to businesses.
    The latest round of cheap bank loans are planned to run for 2 years and begin in September and end in March 2021.
     Economic output in the euro area grew by only 1.1 percent year-on-year in the fourth quarter of last year, the 5th consecutive quarter of slowing momentum, and Draghi said incoming data continues to be weak, especially for the manufacturing sector due to the slowdown in external demand.
      "As the impact of these factors is turning out to be somewhat longer-lasting, the slower growth momentum is expected to extend into the current year," Draghi said, adding the risks surrounding this outlook remain tilted to the downside.
      In an update to its forecast, the ECB in March lowered its forecast for the fourth time and now projects 2019 economic growth of 1.1 percent, down from 2018's estimated growth of 1.9 percent, growth next year of 1.6 percent and 1.5 percent in 2021.
     Inflation remains below the ECB's target and Draghi expects inflation to decline in coming months based on future prices of oil. In the medium term, the ECB expects underlying inflation to slowly rise, helped by its easy policy, continued economic growth and rising wages.
     Inflation in March eased to 1.4 percent in March from 1.5 percent in February and is forecast to average only 1.2 percent this year, then 1.5 percent next year and 1.6 percent in 2021.
     The euro has been depreciating slowly and steadily against the U.S. dollar since April last year and fell abut 0.4 percent following today's policy decision to 1.123 to be down 0.8 percent this year.

Tuesday, April 9, 2019

Serbia maintains rate for 12th time, inflation seen stable

     Serbia's central bank left its key policy rate unchanged at 3.0 percent for the 12th consecutive meeting by its executive board, confirming it expects inflation to remain stable within its target range.
     The National Bank of Serbia (NBS), which has maintained its rate since ending a 5-year easing cycle in April 2018, added medium-term inflation expectations in the financial and corporate sectors also see inflation within its target range of 3.0 percent, plus/minus 1.5 percentage points.
     Serbia's inflation rate has been low and stable for the last 6 years though it rose to 2.4 percent in February from 2.1 percent in January, the highest rate since August last year on higher prices for food and on-alcoholic beverages, recreation and culture.
     As in March, the bank's board said the slowdown in global economic growth, the normalization of monetary policy by the Federal Reserve and the European Central Bank will be slower than expected and it is uncertain to what extent this process will differ from market expectations, which may trigger volatility in the flow of global capital.
     Though trade tensions have eased, NBS said protectionism and geopolitical tensions persist, making developments in commodity and financial markets uncertain, mandating caution in the conduct of its monetary policy.
     Serbia's economy slowed in the second half of 2018 but NBS expects growth this year to be led by domestic demand, such as investment and consumption, while foreign direct investments, which has more than fully covered the current account deficit for more than 4 years and hit 3.2 billion euros in 2018, will continue to reduce external balances.
      Serbia's gross domestic product slowed to annual growth of 3.4 percent in the fourth quarter of 2018 from 4.1 percent in the third quarter and in its February inflation report the NBS forecast growth in 2019 of 3.5 percent before accelerating to 4.0 percent in 2020, led by investments, exports and sustainable growth in household consumption.
      Inflation is projected to slowly rise toward the midpoint of the target range in coming months as the effects of past appreciation of the dinar wane and higher fruit and vegetable prices, the regular adjustment of excise taxes on cigarettes and the increase in utility prices.
     But a drop in petroleum product prices due to the drop in global oil prices in late 2018 and a season fall in the prices of travel and fresh meat will have disinflationary pressures.
     As in 2018, the NBS steps into the foreign exchange market on occasions, including last week, buying euros to keep the dinar from rising too much. The NBS maintains the dinar in a managed float against the euro.
      The NBS has been reported by dealers to purchase euros when the dinar rises below 118 to the euro and today the dinar was trading at 117.93 to the euro, up from 118.15 at the start of the year.

Saturday, April 6, 2019

UPDATE-This week in monetary policy: Israel, Serbia, Sri Lanka, ECB, Namibia, Peru & Singapore

    (Following item has been updated with Singapore)

     This week - April 7 through April 13 - central banks from 7 countries or jurisdictions are scheduled to decide on monetary policy: Israel, Serbia, Sri Lanka, euro area (European Central Bank), Namibia, Peru and Singapore
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.
    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

WEEK 15
APR 7 - APR 13, 2019:
COUNTRY                   DATE                     RATE                LATEST                    YTD              1 YR AGO
ISRAEL8-Apr0.25%000.10%
SERBIA9-Apr3.00%003.00%
SRI LANKA10-Apr8.00%007.25%
EURO AREA10-Apr0.00%000.00%
NAMIBIA10-Apr6.75%006.75%
PERU11-Apr2.75%002.75%
SINGAPORE12-Apr                     N/A                       N/A                      N/A                      N/A

Thursday, April 4, 2019

India cuts rate 2nd time, lowers growth, inflation outlook

    India's central bank cut its policy repo rate for the second time this year to boost growth amid headwinds to its economy, especially on the "global front," and again lowered its forecast for inflation and growth.
     The Reserve Bank of India (RBI) cut its policy rate by 25 basis points to 6.0 percent and has now cut it by 50 points since Governor Shakitanta Das took over from his predecessor Urjit Patel who resigned in December following pressure by Prime Minister Narendra Modi on the central bank to boost the economy ahead of general elections that kick off next week and conclude on May 23.
     The rate cut was expected by investors in light of slowing growth and below-target inflation, and India's rupee only fell about 1 percent to 69.1 per U.S. dollar before bouncing back a bit.
     Today's slight drop in the rupee comes after it has risen almost 8 percent since early October last year and compared with the start of 2019, the rupee is still up around 1.2 percent.
     RBI's rate cut confirms the shift toward easier monetary policy worldwide since January, highlighted by the U.S. Federal Reserve and the European Central Bank's decisions to push back planned rate rises for this year to 2020 while they take stock of the extent of the global slowdown.
      "The slowdown appears to be synchronized across advanced economies and some major emerging market economies as well," Das said, adding there has been a further loss of pace in global economic activity since the previous policy meeting in February which is reflected in decisions by central banks to pause or ease as inflation remains low.
     India's economy began decelerating last year on slower public and private consumption, with total output slowing to growth of 6.6 percent in the fourth quarter of 2018 from 7 percent in the third quarter.
     Since February, when RBI's monetary policy committee also cut its rate 25 basis points,  signs of weakening investment activity have emerged, RBI said, adding slowing global growth might impact its exports, which remained weak in January and February.
     On the other hand, private consumption is expected to improve from public spending in rural areas and higher income from tax benefits, while foreign direct investment inflows remained strong, helping boost foreign exchange reserves and narrow the current account deficit.
     "The need is to strengthen domestic growth impulses by spurring private investment which has remained sluggish," RBI said, adding the output gap remains negative.
     RBI lowered its outlook for economic growth in the current 2019/20 financial year, which began April 1, to 7.2 percent from February's forecast of 7.4 percent. Risks remain balanced.
     After 4 months of decline, India's headline inflation rate rose to 2.6 percent in February but the central bank noted the increase was due to higher prices of goods that exclude food and fuel, such as personal care and recreation, and inflation expectations by households declined.
      In February RBI forecast inflation of 2.8 percent in the fourth quarter of 2018/19 but today it lowered this to 2.4 percent.
     For the first half of 2019/20 RBI forecast inflation of 2.9-3.0 percent, down from its previous forecast of 3.2-3.4 percent, and inflation of 3.9 percent in the third quarter of the current fiscal year, with risks broadly balanced.
     RBI targets inflation of 4.0 percent.
     Unlike February, when RBI's monetary policy committee was unanimous in its decision, 4 of its members, including the governor, voted for today's rate cut while 2 members to maintain the rate.

Monday, April 1, 2019

Ghana holds rate but won't hesitate to tighten if needed

     Ghana's central bank left its policy rate steady at 16.0 percent but said it would not "hesitate to take immediate and decisive policy actions including on a tighter monetary policy stance, should these risks materialize and threaten to dislodge the disinflation process."
     The Bank of Ghana (BOG), which has been in a monetary easing cycle since November 2016, said its monetary policy stance is still relatively tight and real interest rates in Ghana are comparatively high but there are risks to its outlook for inflation from the depreciation of the cedi.
     After BOG cut its rate by another 100 basis points in late January, the cedi fell around 11 percent in February through mid-March, with BOG attributing this to seasonal pressures on the back of foreign exchange demand by importers and corporates, and sentiment over the economic outlook after the completion of the IMF-supported program and its implication for the next election cycle.
     The cedi was trading at 5.35 to the U.S. dollar today, down 9 percent this year.
      Although the full pass through of this depreciation to inflation has yet to be assessed, BOG noted the overshooting of the exchange rate had corrected to 5.2 percent at the end of March compared with 8 percent as of March 19, and is of the view that a slowing pace of disinflation and upside risks to the outlook for inflation are not enough to dislodge inflation expectations.
      Since November 2016 BOG has cut its key rate by 10 percentage points as inflation has steadily declined.
     Ghana's inflation rate rose to 9.2 percent in February from 9.0 percent in January but this is well down from over 19 percent in March 2016, helped by the tight monetary policy stance, and inflation is still within BOG's medium-term target band and inflation expectations remain well-anchored.
    Ghana's economy remains relatively strong, BOG said, adding the negative output gap seems to be closing at a relatively modest pace and 2018 growth is projected at 5.6 percent after average growth of 6.1 percent in the first three quarters, with 2018 non-oil output growing at 5.8 percent.
     For 2019 growth is projected to rise to 7.6 percent, with the composite index of economic activity showing growth of 3.2 percent in January, up from 2.4 percent in December.
     Helped by slightly higher crude oil and gold prices amidst lower cocoa prices - Ghana's three main exports - Ghana's trade surplus improved to 1.3 percent of GDP in the first quarter from 1.1 percent in the same period last year, leading to a 0.3 percent surplus in the current account.
     Together with inflows from Ghana's $3 billion Eurobond in March, the balance of payments is estimated to show a surplus of some US$3.135 billion, or 4.6 percent of GDP, for the first quarter. Excluding the Eurobond proceeds, the surplus is seen at $449 million.