Government Lacks the Credibility in Controlling the Persistent Increase in Inflation Rates Bokpin Argued
Professor Godfred Bokpin, an economist, has criticized the government’s lack of credibility in controlling the persistent increase in inflation rates in the country. Despite implementing several policies to address the issue, the managers of the economy have failed to significantly improve general price levels over the years.
According to Bokpin, the high inflation rates make it difficult to trust the government’s policy prescription and implementation. He commented on the latest inflation figure of 54.1% for December 2022, released by the Ghana Statistical Service.
Inflation for food items was the highest at 59.7% in December 2022, and locally produced items saw a 51.1% inflation rate, while imported items had a 61.9% inflation rate. The Greater Accra region had the highest inflation rate of 66.7%, while the Bono region had the lowest inflation rate of 35.6%.
Despite the high inflation rates, Bokpin believes that the current situation indicates that the country is not yet in an economic quagmire due to mismanagement. However, he thinks that the government has not managed the crisis well, and the variance between the projected and actual inflation rates has been significant
To reverse the trend, Bokpin suggested that the government should implement monetary tightening and austerity measures. He believes that bringing down inflation to 18% by the end of the year is an enormous task that requires a significant level of monetary tightening complemented by austerity from the fiscal side.