Downward trend of inflation would not be permanent - Professor Lord Mensah

Economist and Senior Lecturer at the University of Ghana Business School (UGBS), Professor Lord Mensah, has stated that the downward trend of inflation in the country currently will not be permanent.

Speaking in an exclusive interview with GhanaWeb TV, Prof. Mensah explained that the nature of Ghana’s economic management policy makes it impossible to keep inflation in a continuous and consistent downward trend.

He explained that a lot of factors influence inflation in the country, and most of these drivers have overlapping effects on other sectors of the economy, increasing the chances of inflation rising.

“I would not say that the downward trend of inflation is going to be permanent; I would not say that. The kind of economic management we have is not going to make it permanent. What drives inflation in this country are so many things. We can talk about foreign exchange. We import a lot of things in this country. Look at fuel; an increase in the price of fuel can cause a spike in the price of agricultural produce and many others,” he said.

He also added that, until the country resumes the payment of its external debts, one won't be able to tell the true nature of Ghana’s inflation. He explained, “As a country, we have stopped paying our external debts, which shows that we are keeping more foreign exchange to meet the demands of foreign exchange.

"That keeps the inflation downwards, and you think you are doing well; then truly, you are not doing well. It is like building a mansion when you owe; your debtors would one day put their hands on your mansion. So until we start paying external debts, we cannot tell the true nature of our inflation.”

EAN/BB

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