Economist at the University of Ghana Business School (UGBS), Prof. Agyapomaa Gyeke-Dako, says Ghana’s 5.3% inflation rate recorded in June should not be interpreted as a sign of weakness in the economy.
According to her, the increase was largely driven by temporary external pressures, including global developments that have affected fuel prices and transport costs.
Speaking on Channel One TV’s Quarterly Economic Outlook on Thursday, July 9, under the theme “A Mid-Year Review of the Ghanaian Economy: Measuring Progress, Identifying Risks and Charting the Way Forward,” Prof. Gyeke-Dako said there was no need for excessive concern over the latest inflation figure.
“We are seeing an inflation rate, I think for June, at about 5.3%. I don’t think that there’s a need to worry so much about the 5.3%,” she said.
She explained that while the June figure represents an increase compared to the end of May, the factors contributing to the rise are mainly temporary.
Prof. Gyeke-Dako pointed to global conflicts, particularly tensions in the Middle East, as one of the factors pushing up international oil prices.
She noted that the increase in fuel prices has affected transportation costs and contributed to higher food prices, which have subsequently influenced headline inflation.
“Fuel prices have been affected, so transport fares are also inching up in a way, and then it’s feeding into food inflation,” she added.
However, the economist stressed that these pressures are unlikely to translate into sustained inflationary challenges, especially as core inflation remains relatively subdued.
She explained that core inflation, which excludes volatile items such as food and energy prices, provides a clearer picture of underlying price movements in the economy.
“When you take them out, you see that even though headline inflation, which contains everything in the basket, has inched up, we are seeing core inflation being subdued,” she stated.
She said the relatively stable core inflation rate suggests that price increases are not widespread across the economy, describing the development as a positive sign.
Prof. Gyeke-Dako urged stakeholders to focus on the underlying drivers of inflation rather than the headline figure alone, as the current pressures are largely linked to external shocks rather than domestic economic weaknesses.
