Impact of Inflation on Gross Domestic Product Growth in Ghana

  • Justine G. Kankpeyeng
  • Ishaque Maham
  • Marzuk Abubakar


This paper examines the impact of inflation and other macroeconomic variables  such as physical capital, government expenditure, and money supply on GDP  growth in Ghana. The study obtained data from the World Development Indicators  for the period 1986-2018 and employed vector autoregressive (VAR) models  for the analysis. The results showed that general inflation, low inflation rates,
physical capital, and money supply have positive, statistically, significant, effect  on GDP growth, while, government expenditure and high inflation have negative,  statistically significant, effect on GDP growth for the period studied. The study  concludes that GDP grows positively at a general level of inflation and low rates  of inflation but grows negatively at a high rate of inflation in Ghana. The study,  therefore, recommends that government should implement monetary and fiscal  policies that will help keep inflation rates low and redirect her spending to the  productive sectors in the country to enhance GDP growth.


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eISSN: 0855-6768