An Economics lecturer at the University of Ghana, Legon has explained why the price of goods and services haven’t gone down despite the downward shift in the rate of inflation.
Explaining why the situation is so, the lecturer identified as Dr. Adu Owusu Sarkodie said what is currently happening with the country’s inflation is termed in economics as ‘disinflation.
Describing what this economic terms means, Dr. Adu Sarkodie said it is the situation whereby the rate at which inflation is increasing is slowed. He reiterated that when there is disinflation, it doesn’t necessarily mean the price of goods are going to drop.
According to him, citizens are going to witness a fall in the price of goods and services when the country reaches the deflation stage.
Deflation comes about when rate of inflation falls below zero, and prices of goods experience a general reduction through the economy.
This is when the rate of inflation falls but still remains positive. In this case, prices of goods continue to reduce but a significantly slower rate.
Though the Ghana Statistical Service (GSS) has announced that the rate of inflation has dropped from 35.2% in October, to 26.4% in November, the prices of goods haven’t experienced any drastic reduction and according to Dr. Adu Sarkodie, it is because the country hasn’t gotten to the stage of deflation yet.
