17th August 2022 12:21:56 PM
2 mins readThe Institute of Fiscal Studies has lamented Ghana's macroeconomic instability, which is on the rise.
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The Institute claims that throughout the first seven months of the year, the economy's macroeconomic indicators substantially declined, which caused abnormally high commodity prices.
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Dr. Saeed Boakye, senior research fellow at the Institute of Fiscal Studies, stated, "over the period, the macroeconomy has become highly unstable, with all key indicators worsening at rapid rates," in presenting IFS' assessment of the government of Ghana's fiscal consolidation efforts in the face of the rapidly deteriorating macroeconomic environment.
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As a result, he continued, "The relative price stability the nation had in the previous few years has vanished, as the year-over-year consumer price inflation rate, which, for instance, averaged 9.9% and 10.0% in 2020 and 2021, respectively, reached at 13.9% in January 2022.
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Dr. Boakye claims that this rose to 19.4% in March and reached a peak of 31.7% in July 2022, the highest inflation rate to be recorded in Ghana since November 2003. (i.e., a period of more than 18 years).
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However, the Institute went into depth about how the country's external payment positions have deteriorated significantly, which has led to a sharp decline in the value of the dollar and inflation rates.
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Despite the nation having a trade surplus of $1,44 billion (2% of GDP) in the first half of the year, according to Dr. Boakye, the capital and financial account and current account situations deteriorated, putting the entire balance of payments into a "large deficit."
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He claimed that as a result, "the speed of economic activity has begun to slow down."
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Ghana's macroeconomy is quite unstable, according to IFS
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