Analyst urges focus on high cost of essentials ahead of 2027 budget
Economic and environmental policy analyst Michael Adofo Abuah has urged the government to address the rising cost of essential goods and services as it prepares to roll out its New Economy agenda in the 2027 Budget. He warned that persistent supply-side pressures, particularly in the energy and transport sectors, could undermine efforts to create jobs, […]
Michael Adofo Abuah, an Economic and Environmental Policy Analyst, has urged the Ghanaian government to prioritize addressing the high cost of essentials such as energy, transport, and housing ahead of the release of the 2027 Budget. Speaking to JoyNews Desk, Abuah cautioned that persistent supply-side pressures, particularly in these sectors, could hinder the government's efforts to create jobs, increase incomes, and stimulate economic growth.
The analyst emphasized that supply shocks, partly due to the impact of climate change like El Niño, have led to significant price increases and high inflation rates.
According to data from the Ghana Statistical Service, inflation rose to 5.5% in October, marking its third consecutive monthly increase. Although this rate is below the Bank of Ghana's target of 8% (plus or minus 2 percentage points), essential expenditure categories such as transport and housing continue to experience relatively high inflation. Transport inflation surged to 14.1% in October, while housing, water, electricity, gas, and other fuel inflation stood at 10.5%.
The analyst called for targeted interventions in these sectors, drawing on recommendations from the International Monetary Fund (IMF) concerning the Policy Coordination Instrument (PCI). Abuah highlighted the need to tackle inflationary pressures in essential services, noting that some of these categories remain higher than the overall inflation rate.
He advised the government to exercise caution when adjusting monetary policy rates, suggesting that monetary authorities should be conservative in their rate adjustments to support investment and economic activity.
Abuah's remarks come as the government prepares to implement its New Economy agenda, which is expected to focus on economic growth, investment, and employment. The success of this agenda will depend not only on macroeconomic indicators but also on whether businesses can operate at lower costs and whether households experience meaningful improvements in their living conditions.
Written by urgent.news from MyJoyOnline Ghana's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
