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The Institute of Economic Affairs (IEA), which made this known during a review of the 2014 Budget, said underemployment was high in the country. Dr J.K. Kwakye, a Senior Economist at IEA, presenting the economic Think Tank�s assessment, said �manufacturing, which probably has the greatest potential to generate jobs and agriculture have been stagnating and questions are being raised as to whether the country can ride on services to ensure sustainable development.� He added: �There is some speculation that the �Dutch Disease,� usually manifested by relative decline of the non-natural resources sectors, may be setting in, with oil now taking center stage and agriculture and manufacturing taking back stage.� Inflation He said after remaining at single digit for a couple of years, inflation has risen from 8.8 percent in 2012 to 13.1 percent as of October, this year, adding that the original target of 9 percent for end-2013 is most likely to be breached. �The rising inflation is the result of unusually high seasonal food prices, depreciation of the cedi, upward adjustments in fuel and utility prices and demand pressures.� He made reference to the Global Competitiveness Index Report, 2011-12, which states that access to financing and the high cost of borrowing were the most problematic factors in doing business in Ghana. Public debt �The public debt is said to stand at 53.5 percent of GDP as of September, compared with 49.3 percent at end-2012. At end-2006, the public debt dropped to 25 percent of GDP after Ghana benefited from HIPC and MDRI reliefs. There is a general view that the pace of debt accumulation could return the debt to pre-HIPC unsustainable levels. The risk is higher if the loans are not applied strictly to high-return investments as intended, but diverted to finance recurrent spending.� External sector �The trade balance is reported to be in deficit of US$2.7 billion as of September. The current account deficit is likely to be much higher since we always have a large deficit on the services account. In fact, in 2012, the current account was in deficit by over U$5 billion (or 13 percent GDP). The high external deficit is the result of the high level of import demand, which is only partly offset by exports dominated by low value-added primary products. Ghana�s international reserves stood at US$5.2 billion as of September, equivalent to 2.9 months of import cover. �Countries that are vulnerable to shocks, including commodity shocks as in the case of Ghana, usually need a higher cushion of reserves of at least 4-6 months. The dilemma, however, is that unless we can increase our export earnings significantly, the more we try to stockpile our reserves, the less will be BoG�s ability to support the foreign exchange market, and the faster the cedi will depreciate,� Dr Kwakye pointed out.