The Chief Executive Officer (CEO) of Ishmael Yamson & Associates has blamed the government for the country’s high inflation.
According to Mr Harry Yamson, contrary to widely held notions of being consumer-driven, the government’s huge spending drives the country’s inflation.
“Inflation in Ghana is not driven by consumer behaviour but rather by Government action (expenditure). So from the government side, much work must be done to bring it down.
“Doing so will help bring interest rates down and also help deal with the depreciation of the cedi,” he remarked speaking during the NorvanReports and Ishmael Yamson & Associates X Space Discussion on the topic, “Harnessing the Power of Local for Global Success: Exports from Ghana.”
Increased spending by governments heightens the risk of increased inflation rates in countries.
The Government for this year, has planned to spend some GH¢206bn in expenditure.
Speaking further, Mr Yamson quipped Ghana’s high inflation is affecting the ability of businesses to price and value exports given its impact on the depreciation of the cedi.
“Inflation is a major contributing factor to cedi depreciation, most of the countries we are exporting to have it between 2-8%. But ours is high and it is disturbing the ability of exporters to price and value their products,” he posited.
Ghana’s monthly inflation rate soared to a 10-month high in May, as a sharp slump in the cedi led to a surge in the cost of non-food items.
The annual inflation rate fell to 23.1% from 25% in April due to favourable base effects.
According to Bloomberg, since the start of the year, the cedi has depreciated by 20 per cent against the US dollar, making it the fourth worst-performing currency globally, after the Egyptian pound, Nigerian naira, and Lebanese pound.
