Inflation Rate: 16% NOT 29%

THE Minister of Economic Planning and Regional Co-operation, Dr Paa Kwesi Nduom, has said the current inflation rate is around 16 per cent and not 29 per cent as being peddled by some financial analysts.

He said it is unfortunate that for the past two weeks, certain financial analysts should go from one radio station to another to peddle inaccurate facts and figures about the performance of the economy.

In an interview in Accra yesterday, Dr Nduom said, “There is nothing to suggest that the February 2003 inflation rate will exceed 16 per cent.”

“It is important to disabuse the minds of the public that inflation is rising so as not to cause unnecessary panic in the system,” he stressed.

He said as a result of the conflicting statements, some banks have started charging interest rates of between 39 and 40 per cent.

The minister said the government’s strategy of achieving a single digit inflation rate by the end of the year is on course, adding, “We hope to reduce inflation to nine per cent.”

The National Index for February 2003, published by the Statiscal Service, indicates a rise of 29.4 per cent over the index for the month of February 2002. The report said “this is not unexpected, given that no policy measure is as signifcant as the price increases on petroleum products announced in January 2003.”

It said the yearly inflation for February 2003, as a consequence, showed a relatively small rise from 14.6 per cent in January 2003 to 15.6 per cent.

Giving more details on the inflationary trend, Dr Nduom said what might have accounted for the conflicting statements on the airwaves by some financial analysts was the fact that from February 2002 to February 2003, “inflation increased to about 29 per cent or so” and people have been using this figure to confuse the public”.

He was optimistic that “the target set will be achieved because things are all not that bad.”

“Indeed, there will be a turn-around by June in terms of the direction of the economy,” the minister stressed.

He said the impact of the budget should go to the ground level so that with the HIPC funds being used at the community level, the growth element should begin to be felt.

The minister said the ultimate aim of the government is “to look inward more than we have done, to find resources for development.”

He said the government will, therefore, encourage Ghanaians abroad to be more interested in the economy. “Things are being put in motion and we will surely get there,” the minister assured.