Chasing lower inflation could hurt economy – Prof Quartey
Ghana’s disinflationary run has achieved a major milestone, with consumer price inflation easing to 9.4 per cent in September 2025, the country’s first single-digit reading in four years.
The latest data from the Ghana Statistical Service has been widely welcomed, as it signals a significant easing of the price pressures that have gripped households and businesses in recent years.
From food costs to transportation, inflation had eroded purchasing power, squeezed disposable incomes and intensified the cost-of-living burden.
Yet, even as optimism builds, a leading economist has urged caution. Professor Peter Quartey, Director at the Institute of Statistical, Social and Economic Research (ISSER), has warned that aggressively forcing inflation further down could harm the economy.
“Some level of inflation is good. When the government is spending, when the government is constructing roads, it puts money in people’s pockets. But if you fight inflation so hard, you will be hurting spending and the economy as well,” Prof Quartey explained.
He stressed that the target should not simply be lower inflation at all costs, but rather an “optimal rate” that balances stability with growth.
“We need an optimal rate of inflation, and it has been estimated that anything between 10 to 15 per cent for a developing country like ours is acceptable. At the moment it is 9.4 per cent so it is fine, it is not as bad.
“But if we try to drive it further down it is going to hurt the economy, and it means that government is not spending and that can affect people’s lives significantly,” he noted.
His comments come at a time when policymakers are under pressure to consolidate disinflationary gains. Food inflation has slowed to 11 per cent in September, while non-food inflation fell to 8.2 per cent.
The easing has raised expectations of possible cuts to interest rates, which could allow households and businesses to access cheaper credit and stimulate investment.
But Prof Quartey cautioned that chasing lower inflation without regard to growth trade-offs could backfire.
Over-tightening both monetary and fiscal policy, he added, risks weakening demand, curtailing government investment in infrastructure and slowing job creation.
