The Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has raised concerns about Ghana’s ability to meet its 11% inflation target for 2025. Describing the target as overly ambitious, he pointed to economic challenges that could hinder its attainment.
Speaking at the ISSER 2025 budget review in Accra, Prof. Quartey noted a disconnect between the government’s fiscal policies and economic realities.
He highlighted the persistent inflationary pressures despite some progress in reducing inflation from 55% in 2021 to the current rate of 23%.
Key barriers to achieving the inflation target
Prof. Quartey identified fiscal indiscipline, external shocks, and structural inefficiencies as major obstacles to achieving the proposed 11.9% inflation rate by 2025.
“The budget acknowledges the problem of inflation and proposes measures to stabilise it, but the question is whether the target is achievable?
“An inflation rate of 11.9% by 2025 is an uphill task. We need both fiscal and monetary authorities to coordinate effectively to bring inflation down, but the current trajectory suggests otherwise,” he stated.
He cautioned that while the government’s agricultural transformation policies are aimed at stabilising prices of key commodities in the Consumer Price Index (CPI) basket, they may not be enough to address the root causes of inflation.
Call for a comprehensive approach
Prof. Quartey emphasized the need for a more holistic approach to tackling inflation, one that includes prudent fiscal management and measures to boost investor and consumer confidence.
“We need a more comprehensive approach that includes prudent fiscal management and confidence-building measures to ensure that inflation expectations are well-anchored,” he advised.
Inflation compared to other African countries
Prof. Quartey also pointed out that Ghana’s inflation rate remains exceptionally high compared to other African countries.
He recounted a recent interaction with international partners where Ghana’s 23% inflation rate was met with surprise and disbelief, underscoring the country’s economic challenges.
With doubts lingering over the feasibility of the 2025 inflation target, economic analysts and policymakers will need to rethink their strategies to ensure realistic and sustainable fiscal planning.
