The Ghana Statistical Service (GSS) has called on Regional Coordinating Councils (RCCs) to collaborate with the Service in the collection of data for the computation of inflation figures.
Government statistician, Professor Samuel Kobina Annim, who made the call, noted that this will boost the work of the Ghana Statistical Service in generating inflation figures for the country.
Professor Samuel Kobina Annim explained that over the years, his outfit has been committed to churning out reliable inflation data, to guide the decision of policy makers and other relevant stakeholders. However, he indicated that with enhanced support from the various Regional Coordinating Councils, the computation of inflation will be better enhanced.
“From our point of view, we feel that the Regional Coordinating Councils should really get involved with what is happening in their regions in terms of the data collection, in terms of the figures that we’re putting out.”
Professor Samuel Kobina Annim
Professor Samuel Kobina Annim was sharing his thoughts on the country’s rising inflation rate which hit 27-year high in November 2022. The sharp rise in cost of living in the country raised a lot of concerns as many believe the official figures being churned out by the GSS are underestimated. This, the GSS denied, as it believes its statistics are reliable and a true reflection of what is on the ground.
Currently, national year-on-year inflation rate stands at 50.3%, as of End-November, 2022. Economic and Security analysts assessed that the high cost of living poses a threat to macroeconomic stability and other indicators and could also jeopardize the peace of the country.
Reacting to these concerns, Professor Annim said the Ghana Statistical Service has in recent times, responded to invitations by stakeholders to thoroughly explain the situation, as part of efforts to clarify the high level of inflation.
Ghana’s inflation rate in 2022 was one of the most discussed issues amongst policy makers and ordinary citizens alike.
This is due to the sharp increments in the rate recorded over the period. This has consequently contributed to the country’s current economic crisis which has affected many businesses and livelihoods.
Amidst what seems like a terrible situation, some experts have however, indicated that the situation may get better in the coming year, a position firmly held by the Bank of Ghana which projected inflation to peak in the first quarter of 2023.
Inflation to average 20% in 2023
The Economist Intelligence Unit (EIU) forecast in its 2023 Africa Economic Outlook Report that inflation in Ghana will average about 20% in 2023. This will rank the country 5th on the continent with the highest inflation rate next year.
The EIU however, predicted an average end-year inflation rate of 32% in 2022.
Zimbabwe and Sudan are expected to place 1st and 2nd respectively in Africa with an average inflation rate of 50% in 2023, according to the EIU.
Amid the high inflation forecast for the coming year, Fitch Solutions is projecting a further monetary tightening by the Bank of Ghana in 2023.
According to the UK based research and market information firm, the policy rate will go up by a further 200 basis points to 29% in 2023.
This will trigger an increase in the cost of credit and consequently heighten the cost of doing business in the country.
“We believe that this tightening cycle isn’t over just yet and the Central Bank will hike additional 200 hundred basis point to 29% by the end of 2023. Indeed, if we look at real interest rates it becomes clear that the Bank of Ghana has a history of keeping those real interest rates in positive territories”.
Senior Country Risk Analyst at Fitch Solutions, Mike Kruninger
Mr. Kruninger said the impact of significant monetary tightening in 2022 will restrict corporate and household access to credit in 2023, consequently impacting on the real sector of the economy.
The policy rate went up by 12.5 percentage points in 2022 due to the skyrocketing inflation, rising from 14.5% in January 2022, to end the year at 27%.
