The International Monetary Fund (IMF) has mostly internal causes to blame for Ghana’s high inflation rate.
This refutes the claim that the country’s inflation is the result of outside forces like the Russian/Ukrainian situation, which has driven up the cost of some items, especially wheat and grains.
Abebe Selassie, the African Director at the Fund, stated during a news conference at the recent IMF/World Bank Spring Meetings that their analysis shows that inflation is driven more by endogenous forces than internal variables.
“On inflation, I mean, again, there are always trade-offs when you’re doing, policy calibration, and so in our regional economic outlook, we are very careful to flag that there are some countries where inflation has clearly been driven more by domestic factors than exogenous factors. I think Ghana would fall in that camp.
“But there are also quite a lot of other countries where the inflation we are seeing is more imported inflation, so the scope and the space and the ability of monetary policy to address that is limited. So again, it depends on country-specific circumstances, and on time”.
The calibration of monetary policy, according to Mr. Abebe, must always be flexible.
This is due to the fact that the factors affecting inflation are constantly shifting, as explained by the fact that “exchange rates are moving, commodity prices are altering, thus calibration must be very, looked at again and again and again, as the months pass. Because of this, the Central Bank can state that you must be data-driven and forward-looking, and as a result, our counsel is heavily influenced by these factors.
September 2022 sees a 37.2% increase in inflation.
Inflation in Ghana shot by 3.3% to 37.2% in September 2022.
According to the GSS, five groups recorded inflation rates higher than the national average in September.
They were Housing, Water, Electricity, Gas and Other fuels (68.8%); Furnishings, Household Equipment and Routine Household Maintenance (51.1%); Transport (48.6%); Personal Care, Social Protection and Miscellaneous Goods and Services (42.6%) as well as Food and Non-Alcoholic Beverages (37.8%).
