Manny Ita
Ghana’s inflation rate fell sharply to 3.8 per cent year-on-year in January 2025, down from 5.4 per cent in December, marking the 13th consecutive month of decline and reinforcing signs of improving price stability in the West African economy. The Ghana Statistical Service attributed the slowdown primarily to easing food prices.
Government Statistician Alhassan Iddrisu said the January outcome reflects a broad-based moderation in price pressures. “The sustained decline signals that Ghana is firmly on a path towards price stability,” he said, noting that food inflation fell to 3.9 per cent and was the single largest contributor to the 1.6 percentage-point drop in the headline inflation rate. He added that this is the lowest inflation recorded since Ghana’s Consumer Price Index was rebased in 2021.
Ghana’s inflation surge began in the aftermath of the COVID-19 pandemic and intensified through 2022 amid sharp currency depreciation, rising public debt, and mounting fiscal pressures. Inflation peaked at a historic 54.1 per cent in December 2022, driven by soaring food and fuel prices, weakening household purchasing power, and a loss of investor confidence. The government subsequently defaulted on parts of its sovereign debt, triggering domestic and external debt restructuring.
Since then, fiscal consolidation, exchange rate stabilization, and tight monetary policy have helped reverse inflationary pressures. The Bank of Ghana has cut its benchmark policy rate by a cumulative 12.5 percentage points since July 2025, easing some of the aggressive hikes introduced during the crisis. Governor Johnson Asiama said after the Monetary Policy Committee’s January meeting that it is still too early to reassess the official inflation target of 8 per cent, which operates within a tolerance band of plus or minus 2 percentage points.
Ghana is currently under a three-year IMF support program aimed at restoring macroeconomic stability and debt sustainability, which is scheduled to conclude in August. Analysts say the latest inflation data underscores the progress made in stabilizing the economy but caution that gains must remain resilient to external shocks.
