By Festus Poquie
Liberia’s monetary policy rate remains at 15% for the third time in eight months to contain rising food prices and promote financial sector stability as export earnings decline while the Liberian dollar depreciates.
Inflation is forecast to 9.8% +/-2.0 percentage points, owing to the tightening financial conditions in the global economy and other structural constraints, the Bank said in a statement Tuesday.
“Average inflation for the fourth Quarter of 2022 rose to 9.3 percent compared to the 6.9 percent recorded in the previous quarter, mainly due to increases in the market prices and moderate rise in food and other administered prices of the consumer basket as a result of increased spending during the December festive season.
Declines in the global prices of Liberia’s major export commodities including palm oil, iron ore, rubber, gold, and round logs, during the last quarter of 2022 were of concern to the MPC.
Price pressure could ease because of sustained decline in global crude oil prices, which had the effect of lowering the pump prices of fuel in the domestic economy, it said.
The Liberian dollar is projected to further decelerate to 7.5% for the first quarter of 2023. due largely to high demand for US dollar by businesses for import payments to replenish stocks after the December festive season, it said.
Annual GDP is expected to exceed the initial projection of 4.8 percent from the 5.0 percent recorded in 2021.