EIU certifies that Ghana’s year-end inflation rate for 2023 is 38.1%

The Economist Intelligence Unit (EIU) has updated its prediction that Ghana would see an average end-year inflation rate of 38.1% in 2023.

This suggests that the cost of products and services will be high all year long.

The UK-based organization credits the pass-through impact of freshly enacted levies and raised electricity rates for some of the higher pressure on domestic costs.

The EIU anticipates that, despite a decline in monthly inflation for the most of the time, inflation will continue to grow on average in 2023.

Following two months of decrease, inflation modestly rebounded to 42.2% in May 2023.

The primary factor behind this increase was a spike in food inflation, which increased to 51.8% from the 48.7% noted in April.

The EIU forecasts a small decline in worldwide inflation from 9.2% in 2022 to 7.1% in 2023.

The organization cites causes that will sustain annual inflation far above 2019 levels as high global commodity prices, continuous supply chain disruptions caused by the crisis in Ukraine, and the US dollar’s persistent strength in some regions.

However, when global demand weakens and commodity prices begin to fall back from their high levels in 2022, the EIU predicts a loss of momentum in inflation.

Despite the slowdown in global economic development, central banks are anticipated to continue an assertive approach in their attempts to control inflation.

The majority of large economies’ interest rates are expected to peak by the middle of 2023 and then stay flat through 2024.

The EIU issues a number of danger alerts that might jeopardize its predictions for the world economy.

An intensification of the conflict in Ukraine, social unrest brought on by high inflation, an uptick in tensions surrounding Taiwan, financial contagion following the failure of three US regional banks since March, unrest at Swiss banking giant Credit Suisse, and extreme weather events exacerbated by the anticipated return of the El Nino phenomenon later this year, which could further fuel global inflation, are a few of these.

Source: Ghanatodayonline.com