Navigating Inflation in Ghana - How Can Machine Learning Enhance Economic Stability and Growth Strategies

Aug 3, 2026

Inflation remains a persistent challenge for African economies, with Ghana facing repeated pressures that threaten purchasing power, investment conditions, and long-term growth. This research examines how machine learning can support inflation understanding and management in Ghana by building forecasting capabilities from a dataset covering 2010 to 2022. Time-series focused ML models are applied to predict future inflation trends with accurate, reliable results. The approach aims to guide policymakers toward data-driven economic governance and to strengthen Ghana’s economic resilience through more effective inflation control.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages10

Reading Time25 min

AccessFree to download

Introduction

Background and significance of inflation in Ghana

Review of Literature

Exchange rate and ARIMA studies

ARCH/GARCH/EGARCH modeling

Regional forecasting and seasonal methods

Methodology

Source of data

arXiv :2410 .05630v1 [ econ .EM] 8 Oct 2024 Navigating Inflation in Ghana: How Can Machine Learning Enhance Economic Stability and Growth Strategies Theophilus G. Baidoo 1 , Ashley Obeng2 1 Department of Epidemiology and Biostatistics, Indiana University-Bloomington. 2 Department of Mathematical Sciences, University of Texas at El Paso. Abstract Inflation remains a persistent challenge for many African countries. This research investigates the critical role of machine learning (ML) in understanding and managing inflation in Ghana, emphasizing its significance for the country’s economic stability and growth. Utilizing a comprehensive dataset spanning from 2010 to 2022, the study aims to employ advanced ML models, particularly those adept in time series forecasting, to predict future inflation trends. The methodology is designed to provide accurate and reliable inflation forecasts, offering valuable insights for policymakers and advocating for a shift towards data-driven approaches in economic decision-making. This study aims to significantly advance the academic field of economic analysis by applying machine learning (ML) and offering practical guidance for integrating advanced technological tools into economic governance, ultimately demonstrating ML’s potential to enhance Ghana’s economic resilience and support sustainable development through effective inflation management. Keywords: Inflation, Machine Learning, Time Series, Forecast, ARIMA 1 Introduction The global economic landscape has recently encountered significant challenges, culminating ina state of deadlock. This predicament arises from various factors, including unstable economic growth, fluctuating commodity prices, diminished consumer spending, and the uneven distribution of resources. These issues have collectively deteriorated the standard of living worldwide, plunging many into financial distress. Central to these economic upheavals is inflation, a phenomenon that not only affects Ghana but also has a global impact. Inflation signifies the rate at which the general level of prices for goods and services rises eroding money’s purchasing power. It is a critical macroeconomic indicator, and managing it is vital for maintaining economic stability. Nations endeavor to curb its adverse effects through effective monetary policies. Ghana’s historical struggle with inflation, particularly since the mid-1960s, exemplifies its significance. The country has witnessed periods of high inflation, driven by considerable budgetary deficitsand substantial monetary expansion. Since 2008, the Bank of Ghana has aimed for single-digit inflation to foster investment and encourage sustained economic growth. The advent of the COVID-19 pandemic has aggravated these pre-existing challenges, causing unprecedented disruptions in economic activities and amplifying inflationary pressures. Ghana, alongside other countries, has been significantly affected by the pandemic, which has exacerbated economic hardships and heightened inflation’s impact on the nation and its populace. The pandemic has profoundly influenced the global economy, disrupting supply chains, altering consumer behavior, and necessitating changes in government policies. This has introduced a new layer to the efforts to manage and comprehend inflation within the framework of Ghana’s economic evolution, underscoring the complex interplay between global events and national economic stability. 2 Review of Literature This section of the literature review delves into the various studies and theories aimed at unraveling the causes behind inflation, a critical economic phenomenon with global repercussions. A thorough comprehension of these causes is imperative for devising effective policy measures. The study by Appiah [1] analyzes exchange rate fluctuations between the Ghana Cedi and the US Dollar from 1994 to 2010 . Utilizing the ARIMA model, the research identifies the ARIMA (1, 1, 1) configuration as the optim

FAQs

Why is inflation considered a critical economic issue for Ghana?

Inflation reflects rising general prices and erodes money’s purchasing power, affecting living standards and economic stability. The document highlights Ghana’s historical periods of high inflation linked to deficits and monetary expansion.

How does the study use machine learning to address inflation in Ghana?

The research applies advanced machine learning models, especially for time-series forecasting, to predict future inflation trends. It targets accurate and reliable forecasts to support data-driven policy decisions.

What time range and data sources does the research rely on?

The study uses a comprehensive dataset spanning from 2010 to 2022 for forecasting purposes. It draws monthly inflation rate data from the Bank of Ghana and the Ghana Statistical Service.

Aug 3, 2026

Upload by Valentina