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topic: REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS

A PRESENTATION BY GROUP 19. topic: REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS. What is inflation?. It is the rate of increase in the general price level of goods and services in an economy over a period of time. PATTERN OF INFLATION IN GHANA (2012-2014).

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topic: REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS

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  1. A PRESENTATION BY GROUP 19 topic:REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS

  2. What is inflation? It is the rate of increase in the general price level of goods and services in an economy over a period of time. PATTERN OF INFLATION IN GHANA (2012-2014) REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  3. What is inflation targeting? • Inflation targeting is an economic policy in which a central bank estimates and makes public a projected, or "target", inflation rate and then attempts to steer actual inflation towards the target through the use of interest rate changes and other monetary tools. REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  4. Pattern of inflation targeting in Ghana? REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  5. Why Ghana has failed to achieve its inflation targets • EXCHANGE RATE DEPRECIATION • NATIONAL DEBT SERVICING • EXTERNAL SHOCKS & UNFORSEEN CIRCUMSTANCES • UNREALISTIC TARGETS REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  6. EXCHANGE RATE DEPRECIATION • High demand for foreign products over locally produced ones. e.g Chocolates, Rice, Shoes, Bags, Furniture, Clothing, etc. • More Dollars, Euros, and Pounds to import REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  7. NATIONAL DEBT SERVICING • Increase in taxes • rise in prices of goods and services • Printing of more currencies (Cedi) • increase in the money supply • devaluation of the Cedi • increased prices REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  8. EXTERNAL SHOCKS & UNFORSEEN CIRCUMSTANCES • Increase in fuel prices • Higher transport cost • Higher cost of farming inputs i.e. diesel for irrigation pumps, tractors for ploughing farmlands, premix fuel for fishing activities, etc. • High cost of production • Natural disasters i.e. floods, fire, etc. • Destruction of farms, businesses and property • Shortage in supply of food crops, etc. • Increase in prices of goods and service REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  9. UNREALISTIC TARGETS • Over optimism • Expectation of favourable conditions to occur • Political reasons • Pressure on gov’t from international bodies to reduce inflation REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

  10. THANK YOU FOR YOUR AUDIENCE REASONS WHY GHANA HAS FAILED TO ACHIEVE ITS INFLATION TARGETS || GROUP 19

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