Prices of goods and services will go up in the coming weeks because of increases in fuel prices and the implementation of new levies captured in the 2021 Budget.
However this will be marginal, but may translate into some slight increase in interest rates.
Price increases of goods and services slowed down last month as inflation fell significantly to 8.5%, from 10.5% recorded in March.
Economist and Finance Lecturer at the University of Ghana Business School, Dr. Lord Mensah said “the target for taxes is mainly on fuel and all that, and in this country fuel drives everything -the entire economy, the spine is the fuel. So, without fuel the economy will not move.”
“So as a result of that if we should see increase in fuel at the pump as we have now, I believe that it will build up into pricing because whoever is transporting will definitely add to the price build up. So, I think that because of this pressure [prices going up] that is why the banks are even looking forward to higher interest rates before lending to government”, he added.
“It’s going to be marginal [price increases] because it’s a buildup now and it’s not going to be a drastic increase as expected. It’s going to be marginal because it’s something that needs to build up before it gathers momentum”.
Inflation returns to single digit in April 2021
Inflation returned to single digit as it remarkably fell to 8.5% in April 2021, from the 10.5% recorded in March 2021, figures from the Ghana Statistical Service revealed.
It is the first single digit rate recorded in the year, following the ravaging effects of covid-19 on the economy. This means increases in price of goods and services slowdown in April 2021, comparatively to March this year.
However, it is higher than the rate recorded during the same period last year.
Month-on-month inflation between March and April 2021 was however 1.5%.