June 18, 2024
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Inflation has permeated all sectors of the economy – Dr. Asuming

A Development Economist at the University of Ghana Business School, Dr. Patrick Asuming, says the ongoing inflation situation in the country has become broad-based such that it has permeated all sectors of the economy.

This he says is the reason why the monetary policy hikes by the Bank of Ghana has failed to effectively handle the rising inflation.

He noted that considering how entrenched inflation has become; a short term solution would not work to resolve the situation.

Speaking on JoyNews’ PM Express, he called for a medium to long term approach in resolving the inflation situation such that all the underlining drivers of the inflation are addressed adequately.

“The inflation that we’re currently seeing is extremely broad based and it’s really becoming entrenched. So it’s a configuration of factors but I think whichever way you dissect it, I think wherever it started it’s really pervaded through all the sectors of the economy. And we need to understand that it is the consequence of several things.

“So we have the currency depreciating as has been mentioned, but we’ve also had real challenges with our own food production and then we’ve also had challenges with underlining cost drivers. So I think we see that the policymakers have tried to, especially the Central Bank has tried some measures to try to resolve some of the challenges but I think it’s clear that the measures that are being put in place are not what we really need to fundamentally resolve this.

“I think the monetary policy increases can only do so much because at the moment you can clearly see that the underlining cost drivers; fuel prices, currency depreciation, transport cost, cost of producing itself, so we know that cost of doing business in this country has been rising. So it’s really become very broad based and I think that’s why the persistent increases in the monetary policy rate hasn’t really made a significant dent,” he said.

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