Adnan Adams Mohammed
Ghana’s inflation has taken a sharp nosedive in the past two months, falling from 21.2 % in April to 13.7 % in June, after recording 18.4 % in May.
Base on the recent development, analysts predict that inflation rate could return to single digit by September 2025 beating the government’s own target of mid-2026.
The 13.7% June inflation is the lowest since December 2021 and also is nearing the end-year target of 11.9%.
The Head of Finance at Merban Capital attributes the downward trend to a combination of factors, including sustained cedi stability, a tight monetary policy stance by the Bank of Ghana and falling yields on the Treasury bill market, which continue to absorb excess liquidity from the system.
“All these three factors actually contributed towards the disinflationary pressure. And this can continue even into the third quarter, where we may end up hitting single digit inflation”, Nelson Cudjoe Kuagbedzi noted in a radio interview last week.
“As I did indicate, 11.9% is the target for the year. But having achieved 13.7% as at second quarter, we may end up hitting single digit by September 2025. And this is good news for businesses, good news for individuals, and good news for the government. This inflation rate is going to provoke a lot of activity within the money market”, he added.
However, the Ghana Statistical Service is concerned about price pressures from rent, electricity, refuse disposal, charcoal, and yam which remain the top five price pressure points driving inflation.
Unexpectedly, refuse disposal, despite its small weight of just 0.5% in the inflation basket, saw a staggering year-on-year price surge of 130.9%, making it one of the biggest contributors to the overall rate.
Meanwhile, Government Statistician Dr. Alhassan Iddrisu, has noted that sustained disinflation presents a crucial opportunity to shift from reactive price controls to more structural solutions.
He is urging businesses to rethink their sourcing models, noting that: “With inflation on locally produced goods declining faster than imported ones, businesses can reduce exposure to global supply shocks by increasing local sourcing, especially for food, packaging, and logistics inputs.”
“Businesses could practice strategic pricing, not sharp increases, given the disinflation and even month-on-month deflation as consumers are more price-sensitive.”
In the face of rising food prices — with staples like yam still among the top inflation drivers — GSS also recommends changes in household purchasing behavior:
“Households should lean into bulk purchases of staples, buy local produce where possible, and favor in-season vegetables, cereals, and proteins, which are experiencing sharper price drops.”
As regional disparities in inflation persist, Dr. Iddrisu emphasized that economic policy must become more targeted:
“Tailor social protection and economic policy by Region as blanket policies will not be effective given wide regional disparities in inflation.”
The Government Statistician, while addressing a press conference, attributed the decline to what he described as a significant reduction in inflationary pressures that have weighed on the economy in recent months.
“For the first time in a while, we are recording a month-on-month deflation of 1.2 percent between May and June, suggesting a real and sustained shift in price levels,” Dr. Iddrisu.
Food inflation fell by 6.5 percentage points to 16.3 percent, down from 22.8 percent in May, while non-food inflation also eased to 11.4 percent from the previous 14.4 percent.
However, regional disparities remain stark.
The Upper West Region recorded the highest inflation rate at 32.3 percent, largely driven by rising food and utility costs. In contrast, the Bono Region posted the lowest at 8.4 percent.
Dr. Iddrisu called for the use of more localized, granular data in policy planning to help address these regional imbalances and sustain the national disinflationary trend.
The consistent decline over the past six months offers a hopeful sign for policymakers and businesses alike, especially as government targets single-digit inflation by early 2026
