BoG deploys AI to improve inflation forecasting and economic data gathering – First Deputy Governor

The Bank of Ghana (BoG) has embraced Artificial Intelligence (AI) to enhance its inflation forecasting and streamline economic data collection and analysis. First Deputy Governor Dr Zakari Mumuni revealed that this technological advancement is part of the central bank's broader integration of modeling tools and big data technologies.

Speaking at the 4th Annual Statistics and Data Science Conference in Tamale, Dr Mumuni explained that AI and other modeling tools have bolstered the Bank's accuracy in predicting inflation, even before official data releases. He further emphasized that machine-learning models are utilized alongside standard econometric models to forecast GDP and perform text-mining analytics.

The integration of technology is also revolutionizing the central bank's financial supervision. Previously, supervisors heavily relied on static monthly spreadsheets that required manual reconciliation. However, with the advent of granular data, risks can now be identified earlier as the information arrives in real-time. Dr Mumuni clarified that while econometric techniques and the Quarterly Projection Model within a Forecast and Policy Analysis System are instrumental in assessing economic trends and guiding policy decisions, he cautioned against the notion that technology can fully replace human judgment in economic policymaking.

He reiterated the Governor's directive from February 2025 to adopt a more proactive and precise approach to managing inflation by leveraging advanced data analytics and AI.

Dr Mumuni highlighted that the challenge facing policymakers is no longer just about the availability of data, but how to transform vast amounts of information into useful intelligence. He stressed that data alone is insufficient for policymaking; instead, it's crucial to convert the abundance of data into timely, reliable, and actionable intelligence.

The First Deputy Governor also underscored that the Bank continues to gather information directly from communities and businesses nationwide. Even before a survey appears in a published report, the Bank's Research Department staff are on the ground, tracking prices and conducting business and consumer confidence surveys across markets, including in Tamale.

This ensures that the Monetary Policy Committee's decisions are based on the country's economic realities, not just those of the capital city.

Dr Mumuni appealed to statisticians and researchers to ensure that new technologies complement, rather than supplant, sound statistical methods. He stressed that new data should enhance, not replace, properly weighted and nationally representative measures. Furthermore, he encouraged collaboration between researchers and policymakers, urging researchers to grasp the questions policymakers face, while policymakers remain receptive to researchers challenging data interpretations with insightful questions.