New cash likely to cause inflation – Dr Ato Forson

The Member of Parliament for Ajumako-Enyan-Esiam Constituency, Dr Cassiel Ato Forson has expressed fears about the likelihood of inflation going up by the end of the year.

The concern of the legislator comes on the back of an allegation he had made that the Bank of Ghana had printed an amount worth GH₵22 billion without the knowledge of Parliament.

“Between January and June 2022, the Minister responsible for Finance and the government went to the Central Bank, and they encouraged the BoG to print money worth GH¢22 billion.

“They have printed GH¢22 billion fresh money without the knowledge of Parliament and without informing all of us,” he said to the press after Finance Minister, Ken Ofori Atta, had presented the mid-year budget review to parliament on Monday, July 25, 2022.

According to Dr Ato Forson, the printing of the new money is likely to cause inflation to rise and consequently impact the country’s reserves.

“I am saddened, no wonder inflation is galloping, no wonder that our reserves position is dwindling because when you create new money out of the thin air, what happens is that inflation will go up and obviously,” the MP who was a former Deputy Finance Minister said.

“Because it is new money, you will end up losing your reserves because there would be new consumption. If this trend continues, I won’t be surprised that we will end the year with inflation of about 50 percent.”