According to the International Monetary Fund, Ghana’s rising inflation is primarily caused by domestic factors.
Abebe Selassie, the African Director at the IMF, claims that Ghana is one of the nations where internal forces are mostly to blame for inflation.
As of September 2022, Ghana’s inflation rate—which has been rising since the year’s beginning—was 37.2%.
However, the government has stated that the COVID-19 epidemic and the Russia-Ukraine war are just two examples of the global events that have contributed to the inflation.
Speaking at a press conference at the recent IMF/World Bank Spring Meetings, Abebe Selassie, said “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 important, 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,” he is quoted by myjoyonline.com.
The IMF added that the adjustments of the monetary policy must be done swiftly because the adjustments affect how inflation is driven in the economy.
He said, “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,” he added.
According to the GSS, the factors that influenced inflation 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%).