Professor Patrick Asuming, a lecturer at the University of Ghana Business School, has observed that the prices of goods and services in Ghana continue to increase, even as the country’s economy shows signs of recovery.
He noted that although the rate at which prices are increasing has slowed, this does not mean that goods and services are becoming cheaper. He observed that while the financial and monetary aspects of the economy have shown improvement, the real sector continues to lag behind.
He explained that there is a disconnect between the public’s perception of the economy and what the macroeconomic indicators suggest. Although inflation is easing and the Producer Price Index has dropped from around 18 percent to 10 percent, he stressed that this only reflects a slower rise in prices, not a decline.
He acknowledged the strengthening of the currency but pointed out that other key components of production—such as rising tariffs, stable wages, and increasing domestic production costs—continue to push prices up. He added that the overall economic outlook has improved mainly because the government acted swiftly to stabilize its finances.
He stated that the government has performed well in managing the fiscal side of the economy. He added that the country’s reserve position has strengthened, attributing this improvement partly to sound policy decisions and partly to favorable global prices for Ghana’s export commodities.
He told the media on Thursday, June 19, that although key indicators suggest economic progress, a closer look reveals that the real economy—the part that affects people’s daily lives—is not recovering at the same pace.
Meanwhile, the Governor of the Bank of Ghana, Dr. Johnson Asiama, has offered an explanation for why many Ghanaians are not yet seeing price reductions, despite the recent appreciation of the Cedi against the Dollar. He noted that many traders had stocked their goods when the exchange rate was higher, so price adjustments tend to lag behind currency movements.
However, Dr. Asiama expressed optimism, assuring the public that prices would eventually respond to the stronger Cedi, especially in a competitive market environment.
When asked about the sustainability of the Cedi’s appreciation, Dr. Johnson Asiama explained that it should be viewed in context. He noted that while nominal stability is important, avoiding persistent real appreciation is crucial to maintaining Ghana’s competitiveness. He said the appreciation is market-driven, not a result of central bank intervention, and reflects the country’s strong monetary policy stance and favorable international flows. The Bank of Ghana is monitoring the trend but believes it is currently in line with economic fundamentals.
At a press conference, Dr. Asiama also announced that the Monetary Policy Committee has maintained the policy rate at 28%. He reported a steady decline in headline inflation over the first four months of 2025, driven by both food and non-food components. He highlighted strong external sector performance, with a provisional current account surplus of $2.1 billion in Q1 2025, mainly from increased gold and cocoa exports and robust remittance inflows. This led to a balance of payments surplus of $1.1 billion and boosted gross international reserves to $10.7 billion—equivalent to 4.7 months of import cover. The external outlook remains positive.
#CediUp #InflationDown #ExportsUp #StrongReserves #GhanaEconomy
