IEA predicts 15-17% inflation in 2025
The Institute of Economic Affairs (IEA) is predicting an inflation of 15-17 per cent in 2025.
This would be higher than the International Monetary Fund forecast of 8 per cent and the Bank of Ghana’s target of 8 +/- 2 per cent.
In its bi-monthly economic outlook, it said inflation should be reduced even further through stronger intervention measures.
The year 2024 ended with inflation of 23.8 per cent, slightly higher than the rate of 23.0 per cent recorded in November.
The end-year inflation was also higher than the 18.0 per cent projected under the IMF-sup
ported programme.
Throughout the year, inflation remained stuck in the low twenties, far above the Bank of Ghana’s target of 8 +/- 2 per cent.
Under the IMF programme, inflation is projected to drop to 8.0 per cent in 2025, the Bank of Ghana mid-point target. This would imply a drop of 15.8 percentage points from the 2024 rate.
This drop, the IEA stated, would, however, seem a bit optimistic, given the poor historical record.
It, therefore, alluded that “a more likely outcome would be 15-17 per cent.
During 2026-29, inflation is projected to remain at 8.0 per cent.
This would appear to be a more realistic scenario, although it would require strong policy measures to achieve those outcomes.”
In December, food inflation was 27.0 per cent, much higher than non-food inflation of 20.3 per cent.
Indeed, throughout the year, food inflation was almost consistently higher than non-food inflation and overall inflation.
This indicates the importance of food, which accounts for 43 per cent of the Consumer Price Index (CPI).
The IEA said the importance of food, along with energy and the exchange rate, in driving inflation recently was well-known
BY TIMES REPORTER
Read Next
January 30, 2025
Afreximbank launches African Research and Innovation Hub to advance academia understanding of intra-African trade
January 29, 2025
OmniBSIC Bank ushers in strategic evolution with new tagline
January 29, 2025
Insurance companies urged to prioritise customer service
January 28, 2025
Taptap Send, Manhyia Palace partner to drive development through fee-free remittances
January 28, 2025
Ghana records $8.98 billion in Gross International Reserves – BOG
January 27, 2025
Take action against businesses that fail to honour tax responsibilities – Economist
January 27, 2025
Ghana’s public debt declines – Bank of Ghana report
January 24, 2025
Absa Bank donates to Okuapeman SHS visually-impaired students
January 24, 2025
December Producer Price Inflation falls marginally
January 23, 2025
MoMAG lauds govt decision to remove E-Levy
