The Government Statistician, Prof. Samuel Kobina Annim, has advised the government to measure the impact of its fiscal policies on price stability by looking at the month-on-month inflation.

He is of the view that the month-on-month inflation provides a better assessment of fiscal policies that are needed to help the monetary policy tools of the Bank of Ghana to stabilise prices.

He stated that the month-on-month inflation could be a medium term measure in keeping prices at predictable level to help businesses and households plan their expenditures.

“When month-on-month inflation is volatile, it indicates that there are many system shocks and limited providence. As a result, when systemic shock occurs, the economy’s major parameters change”, he said.

He added that the month-on-month inflation provides a better picture of how price change affect consumers in the short term.

This, he said could be used to influence policy decisions to better improve the lives of individuals.

“If you are thinking about how to handle inflation, you should consider the degree to which the month-on-month inflation can be somewhat stable. Because month-on-month inflation can be easily calculated by taking what is happening now and comparing it to the same time last month”.

Prof. Annim recounted that the idea has been stated several times to policy makers.

“If your policies are having an impact in between, then you need to continue to see some stability in your month-to-month inflation. Because year-over-year inflation is calculated by taking what is happening now and saying this time last year, what was the situation?”, he said.