Inflation rise must be a cause for worry to government – Economist

Economist and Associate Professor of Applied Finance and Economics at the University of Ghana Business School, Professor Lord Mensah says the recent consecutive rise in inflation is a cause for worry.

The Ghana statistical service pegged June 2023’s inflation at 42.5% an increase in the 42.2% recorded for May this year.

This will be the 2nd consecutive month that inflation would see a rise after dropping for four consecutive months at the start of the year. Month-on-month inflation however saw a drop from 4.8% in May to 3.2% for June.

Speaking on Starr Today with Joshua Kodjo Mensah, the economist indicated that the recent reversing trend is worrisome.

“Over the past few months, we’ve had inflation being above treasury bills and as an investor or potential investor the hope was that the inflation trend of coming down will continue and so if it does not come down it is a cause to worry,” he stated.

Prof. Lord Mensah also adds that the efforts to tackle inflation have been counterproductive.

“It is a cause to worry because if you look at the IMF programme, we seem to be having neutral forces that are supposed to bring inflation. One arm of the programme is saying that the government should enhance revenue collection and revenue collection as we speak is through taxes. And once you are paying more taxes business will pass it on to the consumers by doing so increases prices.

“On the other side, the same IMF programme is also looking at tightening the monetary policy to fight inflation. So one arm is trying to bring fighting inflation down, the other is fuelling inflation. So you ask yourself, how are we going to bring inflation down? We cannot continue to have inflation above treasury bills, it’s not sustainable as the real value of whatever investment you are doing is negative. We need to bring inflation down,” he re-echoed.