Home Business Drop in inflation won’t change prices of goods and services – expert

Drop in inflation won’t change prices of goods and services – expert

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PPI
PPI

A senior Research Associate with the Africa Research and Consulting Centre, UK, and an International Trade expert, Dr. Sanusi Zankawah has cautioned Ghanaians against expecting any significant drop in prices of good and services despite the recent decline in inflationary pressures.

This he said is because many other factors aside inflation come into play in determining the market Price of goods and services.

In a statement copied to blogger Ananpansah Bartholomew Abraham, the US based Ghanaian trade expert posited that Ghana will continue to experience high prices of goods and services in the midst of a declining inflationary pressures due to currency depreciation, high production cost, import dependence, inadequate infrastructure among others.

He said the country’s poor road networks, unreliable power supply, and inadequate storage and distribution facilities contribute to higher prices since these infrastructure challenges directly affect production and distribution processes, leading to increased costs for businesses.

“Currency depreciation has played a significant role. The decline in the value of the Ghanaian cedi against major international currencies has increased the cost of imported goods, leading to higher prices for consumers. Secondly, high production costs have also contributed to the overall price levels.

Factors such as the cost of raw materials, energy, and labor have risen, forcing producers to pass on these costs to customers. Moreover, Ghana’s heavy dependence on imports further exacerbates the issue.

The country heavily relies on imported goods, making it vulnerable to fluctuations in global markets, supply chain disruptions, and transportation costs,” he maintains.

The recent drop in inflation in Ghana he observed, has influenced consumer behavior in several ways, adding that, despite the drop, high prices still prevail due to factors such as currency depreciation and import dependence.

Consumers according to him, have become more cautious with their spending, prioritizing essential goods and services. Additionally, consumers are seeking alternatives and cheaper options to cope with the high prices. This change in consumer behavior reflects the impact of inflation on purchasing power and overall consumer sentiment.

He said until effort is made to contain the impact of socioeconomic factors, market speculation and hoarding, limited supply of essential commodities, reduced thirst for luxurious goods and services inter alia, a decline in inflation would not significantly give consumers the leverage they expect.

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