Economist and Senior Lecturer at the Department of Economics here at the University of Ghana, Dr. Adu Owusu Sarkodie has opined that Ghana can achieve a single digit inflation rate by the end of 2025.
He believes that with the end-year inflation target of 15% by the Bank of Ghana, and a strict fiscal and monetary policy, Ghana can hit an inflation rate of less than 10%.
Speaking on the Behind the Headlines show on Radio Univers, Dr. Adu Owusu Sarkodie highlighted the International Monetary Fund IMFs prediction of Ghana returning to pre-COVID economic stability and growth by 2026.
“I believe that we can return to the pre-COVID levels where we were experiencing standard of good inflation. I think by the end of 2025, we should be getting there because if we assume that we end the year 2024 with 15 to 17% inflation, then with the effect of the fiscal and the monetary, we are likely to return to the standard of good inflation by the end of 2025.”
“The IMF projections all point to the first quarter of 2026 because that is where they think that Ghana will return to all the good old days of 2019, where we had single digit inflation, our GDP growth was around 7%, our unemployment rate was below 10%. So all the single digit depreciation rate, single digit inflation, single digit unemployment rate we may return to those figures by first quarter of 2026.”
Dr. Adu Owusu Sarkodie also explained that the year 2025 is devoid of elections, which are usually surrounded by economic uncertainties and tensions, thus cementing the International Monetary Fund’s prediction of Ghana’s economy stabilizing and growing by the first quarter of 2026.
“The other thing is that we are only going to have elections in 2024. 2025 would not be an election year. So all the uncertainties surrounding election year globally and also domestically all wither away by 2025 going into 2026.”
“So honestly, if you look at all the projections by the IMF and all the documents, we are likely to return to a better gaze by the first quarter of 2026.”
He also emphasized the importance of developing the local economy to reduce over reliance on foreign imports which contribute to inflation.
“The reason we still have high food inflation is because most of the inputs that we use to produce food are imported and then number one is fertilizer. But if we are able to produce fertilizer locally, then no matter what happens in Ukraine or Russia or Israel, Palestine, we will still have a low cost of producing food in the country.”
Story by: Alexander Kuuku Osei-Baidoo | univers.ug.edu.gh
