By:Mohamed Jalloh
The monetary policy committee (MPC) of the Bank of Sierra Leone has revealed in a press statement that the global economic outlook still remains uncertain despite the forecast showing a decline in food and energy prices by the end of 2023 and early 2024.
Even with the uncertainty, the release furthered that the global economic outlook recovery will be further aided by the reopening of the Chinese economy and the general improvement in business and consumer confidence.
However, the release mentioned that heightened levels of uncertainty persist due to the associated risk of contagion from the financial sector turbulence in the United States and ongoing geo-political tensions between Russia and Ukraine.
The MPC also states that the downsized risk still remain and continue to slow the rebound in global economic activities, which is further compounded by challenges in global trade, sovereign debt crisis and tightening of credit conditions.
“Given that commodity prices are expected to fall during 2023 and pick up in 2024, both energy and non-energy prices are expected to slow down in 2023 due to weaker than expected demand”, the release states.
The release also stated that there has been a decreasing trend in food prices with the ease in global supply chain disruptions and redirection of trade for agricultural inputs.
However, the release noted that commodity prices are expected to remain above pre-pandemic level which will continue to weigh on availability and food security.
Given these developments, the release states that the MPC is of the view that the decrease in global food prices coupled with the improvement in global supply chain is expected to reduce the country`s import bill.
Additionally, it is believed that strong iron ore prices may boost export receipts and the receding global commodity prices may also translate into lower imported inflation going forward.
