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, […]
Economic and environmental policy analyst Michael Adofo Abuah has called on the government to focus on the high cost of essential goods and services ahead of the 2027 Budget. Speaking on JoyNews Desk, Abuah warned that supply-side pressures, particularly in the energy and transport sectors, could hinder job creation, income growth, and economic expansion.
The government should give greater consideration to the prices impacting ordinary Ghanaians, Abuah said, emphasizing the significant supply shocks and high rates in the current environment, including the effects of El Niño on energy prices. Data from the Ghana Statistical Service reveals that inflation increased to 5.5% in October, marking its third consecutive monthly rise.
While this rate is below the Bank of Ghana's 8% target, certain essential expenditure categories still exhibit relatively high inflation. Transport costs have surged to 14.1% in October from 5.7% in September, while housing, water, electricity, gas, and fuel inflation stands at 10.5%. Abuah suggested targeted interventions in these sectors, especially considering potential climate-related disruptions, advising on measures recommended by the International Monetary Fund (IMF) in their Policy Coordination Instrument (PCI) reports.
He noted that inflation in certain categories outpaced the overall headline rate, stressing the importance of addressing these pressures for job creation, income growth, and economic stimulation. Abuah also cautioned against rapid adjustments in the policy rate, recommending a conservative approach from the central bank to support investment and overall economic activity.
As the government prepares to implement its New Economy agenda, economic growth, investment, and employment are anticipated to be significant aspects of the 2027 Budget. Abuah emphasized that the success of this program would hinge not only on economic indicators but also on whether businesses can operate at reduced costs and households witness tangible improvements in their living standards.
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