Adnan Adams Mohammed
All things being equal, Ghana’s unemployment rate is expected to grow averagely around 4.0 percent this year through to 2026, Fitch Solutions report projected.
Unemployment conditions in Ghana has been on steady rise since 2017 and is anticipated to continue along this trajectory in the medium term and beyond.
However, the report highlighted several challenges affecting the country’s labour market. Ghana’s workforce is constrained by a low life expectancy of around 64.3 years, largely due to limited government expenditure on healthcare and the prevalence of water-borne diseases and chronic illnesses such as HIV/AIDS.
“A shortage of highly skilled workers forces employers to look abroad to fill gaps in the domestic labour market”, Fitch stated in its latest report.
Also commenting on the economy and standard of living, Fitch Solutions pointed to broader economic challenges stemming from the reopening of global economies following the Covid-19 pandemic.
It indicated persistent inflationary pressures fuelled by both demand-pull and cost-push factors.
“In an effort to reduce inflation, central banks have implemented policy rate increases at some of the most rapid paces in history,” the report stated. “This has decreased the value of debt accrued during the historically low-interest rate period from 2015 to 2019.”
While household wealth has reached historic highs, driven by strong equity market performance and rising house prices, some property markets are beginning to show signs of weakness. Additionally, the outlook for many companies is becoming increasingly negative.
The report warned that if these trends continue to worsen, a significant decline in consumer wealth could trigger a sharp drop in consumption.
Economists argues inflation drop disconnected from policy rate impact
Ghana Statistical Service indicates inflation rate drop to 20.4 percent in August down from 20.9% in July this year.
Although, the August drop marks the sixth consecutive month of decline since
March which recorded inflation of 25.8%, an economist alludes that, the decline does not reflect the Bank of Ghana policy rate effect.
GSS attributed the decrease to a significant drop in food inflation, which fell to 19.1 per cent in August. However, non-food inflation rose to 21.5 per cent.
“Ghana continues to experience upward changes in prices. Between August 2023 and August 2024, general price levels of goods and services increased by 20.4 percent”, Prof. Samuel Kobina Annim, the government Statistician has said a press conference last week. “Disaggregating this, non-food inflation was 21.5 per cent in August 2024 compared to food inflation at 19.1 per cent.”
