Inflation in Ghana is driven more by domestic factors-IMF.
The International Monetary Fund has asserted that domestic factors are more 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 in 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.
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”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”
Additionally, Mr. Abebe stated that monetary policy’s calibration must always be flexible.
This is because the conditions that affect inflation are always changing, adding, “exchange rates are moving, commodity prices are moving, so it’s an area where, calibration must be very, looked at again and again and again, as the months proceed. That’s why, Central Bank can say you have to be forward-looking, data-driven, so our advice is also, very much, subject to those considerations”.
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What at all is inflation?
Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. Inflation measures how much more expensive a set of goods and services has become over a certain period, usually a year
Inflation surges to 37.2% in September 2022
Ghana’s inflation increased by 3.3% in September 2022, reaching 37.2%.
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The Ghana Statistical Service reports that in September, five categories had inflation rates that were higher than the country as a whole.
Housing, Water, Electricity, Gas, and Other Fuels made up 68.8% of this category, followed by Furniture, Household Equipment, and Routine Household Maintenance (51.1%), Transport (48.6%), Personal Care, Social Protection, and Other Goods and Services (42.6%), and Food and Non-Alcoholic Beverages (37.8%).
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