The International Monetary Fund (IMF) has attributed the high inflation in Ghana to largely domestic factors.
This dismisses the argument that inflation in the country is due to external factors such as the Russian/Ukraine crisis which has pushed prices of some foodstuffs, particularly wheat and cereals up.
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At a press conference at the recent IMF/World Bank Spring Meetings, African Director at the Fund, Abebe Selassie, said its analysis show that inflation is driven more by domestic factors than exogenous factors “On inflation, I mean, again, there are always trade-offs when you’re doing, policy calibration, and so in our regional economic outlook, we are very careful to flag that there are some countries where inflation has clearly been driven more by domestic factors than exogenous factors. I think Ghana would fall in that camp.
“But there are also quite a lot of other countries where the inflation we are seeing is more imported inflation, so the scope and the space and the ability of monetary policy to address that is limited. So again, it depends on country-specific circumstances,
and on time”.
Mr. Abebe also said the calibration of monetary policy must be always agile.
This is because the conditions that affect inflation are always changing, adding, “exchange rates are moving, commodity prices are moving, so it’s an area where, calibration must be very, looked at again and again and again, as the months proceed.
That’s why, Central Bank can say you have to be forward-looking, data-driven, so our advice is also, very much, subject to those considerations”.