Drop in inflation means prices of goods are rising but slowly; doesn’t mean prices have reduced – UGBS Economist

Economist at the University of Ghana Business School (UGBS), Professor Patrick Asuming has indicated that Ghanaians expect prices of goods and services to go down when inflation drops because they lack understanding of inflation.

Proving an explanation on TV3, Prof. Asuming said although inflation in May dropped to 23.1%, it does not mean prices of goods and services will reduce automatically.

He said what it means is that prices are rising but at a slow pace.

“I will understand why people will feel disconnected from the numbers that the statistical service put out as the rate of inflation. One reason is that people have some misunderstanding of what the inflation rate is.

“So when we say the inflation rate has reduced it doesn’t mean prices have reduced. If you compare the rate for last month, it was 25 percent, this month it has gone down to 23.1 percent, it doesn’t mean that prices have fallen, it means that prices are rising but slowly,” Prof. Patrick Asuming said.

He continued, “So the rate at which prices are rising is slowing down. That is one part of the misunderstanding.”

The Ghana Statistical Service on Wednesday announced that it recorded inflation of 23.1%.

It is the lowest inflation recorded in the country in the last 26 months.