Veteran journalist Kwesi Pratt Jnr. has provided a firm clarification on the perceived disconnect between declining inflation rates and stagnant market prices, during an appearance on Metro TV’s Good Morning Ghana monitored by MyNewsGh.
Responding to earlier remarks by Collins Adomako-Mensah, Member of Parliament for Afigya Kwabre North, who expressed concern that inflation figures were not reflecting in real market prices, Pratt stated that the interpretation of inflation is often misunderstood.
The definition of inflation is the rate at which prices rise,” Pratt noted. “So that rate can drop, but prices can still rise — of course, but at a lower rate.”
He explained that while Ghana’s inflation rate has declined to 13.7%, this does not mean that prices will necessarily fall, but rather that the pace of increase has slowed.
“You say inflation has gone down but you don’t see price reduction and so on. There’s a problem with your economics. The operational word here is the rate at which prices are rising,” he said.
Pratt emphasized that it is critical for public discussions around economic issues to be informed by proper understanding of economic principles.
“We need to understand that very clearly. This is pure, simple economics — even at the elementary level,” he asserted.
