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

The Bank of Ghana (BoG) has integrated Artificial Intelligence (AI) to enhance its inflation forecasting and bolster the process of gathering and analyzing economic data. First Deputy Governor Dr Zakari Mumuni announced that this technological advancement is part of the central bank's broader adoption of modeling tools and big data technologies.

Mumuni explained that these tools are aiding the bank in refining its forecasts and supplying more valuable information for monetary policy decisions. Speaking at the 4th Annual Statistics and Data Science Conference in Tamale, Mumuni stated that AI and other modeling tools have improved the Bank's ability to predict inflation, even ahead of official data releases.

He added that the bank utilizes machine-learning models in tandem with traditional econometric models to forecast GDP and conduct text-mining analytics. The technology is also revolutionizing the central bank's financial supervision, as supervisors can now monitor data as it arrives, identifying potential risks more promptly. Instead of relying solely on static monthly spreadsheets that require manual reconciliation, the Bank now receives granular data in real-time, allowing for earlier identification of risks.

Mumuni clarified that the Bank also relies on econometric techniques and its Quarterly Projection Model to evaluate economic developments and guide policy choices. By employing these econometric methods through a Forecast and Policy Analysis System, the Bank can identify emerging trends, assess risks, and evaluate the potential outcomes of various policy decisions.

However, Mumuni cautioned that while technology can augment the Bank's intelligence, it cannot substitute human judgment in economic policymaking. He reiterated the Governor's directive in February 2025 to adopt a more proactive and precise approach to managing inflation, emphasizing the Bank's commitment to leveraging advanced data analytics and AI.

The greatest challenge facing policymakers today, Mumuni stressed, is no longer the availability of data, but rather the ability to transform vast amounts of information into timely, reliable, and actionable intelligence. He stressed that data alone is insufficient for policymaking. The Bank continues to collect information directly from communities and businesses across Ghana, with Research Department staff actively tracking prices and conducting surveys in markets nationwide.

These efforts ensure that the Monetary Policy Committee bases its decisions on a comprehensive view of the country's economic conditions, not just those prevailing in Accra. Mumuni urged statisticians and researchers to ensure that new technologies complement, rather than replace, robust statistical methods. He emphasized that newly acquired data should enhance, not supplant, properly weighted and nationally representative measures.

Moreover, Mumuni encouraged collaboration between researchers and policymakers, urging them to understand each other's perspectives and questions to maximize the potential of technology in economic decision-making.