Headline inflation to remain high in 2023, 2024 – EIU warns Ghana, others

The Economist Intelligence Unit (EIU) has cautioned Ghana and some African countries that headline inflation is expected to remain high, resulting in public discontent in 2023, 2024.

According to the the 2023 Africa Operational Risk Outlook released by the UK-based firm, elevated headline inflation on the regional front is expected to be driven by rising global food prices and commodity, weakness in the local currency against the US dollar and among other factors.

It noted that, “Regional headline inflation will remain high, driven by still-high global commodity prices, lingering supply-chain tightness, high regional food prices and local-currency weakness against the US dollar for most countries, fuelling discontent in 2023-24—as already seen in Ghana, South Africa, Kenya, Tunisia and Madagascar”.

“Inflation also continues to run high as subsidy regimes buckle under the fiscal strain—including in Angola, Malawi, Nigeria, Ethiopia, Sudan and Madagascar”, the EIU report pointed out.

The EIU further warned that public discontent over worsening living conditions among the aforementioned countries could result in pent up frustration against foreigners and attacks on private property which could compound the woes leading to violent crime and large protests.

It also noted that continued sharp rise in price growth could adversely impact on living standards while increasing public frustration on the back of unchanged employment wages across the region.

“This makes it harder for poorer households to purchase basic staples,” the EIU stressed.

The UK-based firm said high unemployment across most of Africa could also force workers employed by large firms to co-ordinate large-scale strikes in demand of salary increments.

MA/NOQ

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