Professor Peter Quartey, Economist and Director of ISSER
• Inflation rate for Ghana is projected to stay at 9.8% by end of 2021
• This is according to a 2021 Africa Pulse Report by the World Bank
• Prof. Peter Quartey believes the rate falls within the BoG’s target of 8% +/-2
Head of the Institute of Statistical Social and Economic Research (ISSER), Prof. Peter Quartey, has agreed with a recent prediction by the World Bank on Ghana’s end-of-year- inflation rate.
The Bretton Woods institution in its 2021 Africa Pulse report has projected Ghana’s inflation rate is expected to end 2021 at 9.8 percent, a figure which falls within the Bank of Ghana’s target band of 8 +/-2%.
“In Ghana, weak domestic currency combined with a rise in food prices pushed headline inflation from 9 percent year-on-year in July to 9.7 percent in August, slightly closer to the upper bound of the official target band of 6 to 10 percent. It is estimated to remain close to the upper bound at 9.8 percent in 2021 and gradually decrease to 6.8 percent in 2023,” the report explained.
Reacting to the development in an interaction with Citi Business News, Prof. Quartey said, “Inflation is normally driven by demand or supply factors, so if your supply of goods and services increases, then you’re likely to dampen demand pressure. We’ve seen agriculture being resilient and agriculture production increasing over the post-COVID era. So, prices have not increased as expected.”
“The demand pressure will not increase as high as we recorded in the pre-COVID era because most businesses haven’t recovered fully. Therefore, my expectation is that we’ll still be within the target band for the year,” the economist added.
Meanwhile, the World Bank’s projection of 9.8 percent as the inflation rate means the average change in the price of goods and services will be marginal from now till the end of 2021.
According to the Ghana Statistical Service, the country’s current inflation rate stands at 9.7 percent and is attributed to the continuous price hikes in food and petroleum products which impacts on the delivery of goods and services.