The inflation rate in Ghana has stayed above 20% for 34 consecutive months.
According to the Institute for Fiscal Studies (IFS), this is very problematic, since such an extended period of time with inflation rate in Ghana exceeding 20% was thought to be a thing of the past.
This is because higher inflation had been absent in the country for the past two decades before the current economic crisis.
According to IFS, the current high inflation rate is as a result of macroeconomic instability due to excessive borrowing and high debt servicing.
“In fact, from February 2004 to December 2021, a period of 215 months, inflation rate stood above the 20% mark for only 6 months – from February to July 2009. This followed the 2008 fiscal slippage in Ghana and the 2007-2008 global financial and food price crises”, it said in a statement.
“Interestingly, after these six months that saw inflation rate exceeding 20%, a powerful disinflation process set in, causing inflation to hit single digit rates for 31 consecutive months from June 2010 to December 2012. Therefore, the continuously high inflation rate of above 20% being currently witnessed in Ghana for such an extended period of time should be seen as alarming”, it added.
Inflation fell marginally in January 2025 to 23.5%, from an eight-month high of 23.8%.
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