Economist Criticizes Ghana’s 2025 Inflation Goal as Too Ambitious Despite Recent Progress

Economist Professor Patrick Asuming has expressed concerns over the government’s 2025 inflation target of 11.9%, labeling it as “a little aggressive.” This comes after Ghana’s efforts in 2024 to reduce inflation below 23% were unsuccessful, with the rate staying above 22% for much of the year. While Asuming acknowledges that other macroeconomic goals in the 2025 budget appear attainable, he emphasizes that achieving the inflation target will require a more robust and strategic approach.

In an interview with Citi Business News, Professor Asuming pointed out that the government is likely to implement both fiscal and monetary measures to achieve its goal. Despite the challenges, he believes that the target for Gross International Reserves, which has been set lower than in 2024, remains feasible. He also noted that apart from the inflation target, the remaining goals in the budget seem achievable.

February 2025 saw a slight decrease in the inflation rate to 23.1%, a drop from the 23.5% recorded in January. This marks the second consecutive month of decline, attributed primarily to a reduction in food prices, according to the Ghana Statistical Service. Food inflation dropped to 28.1%, while non-food inflation held steady at 18.8%.

For the 2025 fiscal year, the government has set five key macroeconomic targets, including an overall GDP growth of 4.4%, a non-oil GDP growth of 5.3%, an end-period inflation rate of 11.9%, a primary surplus of 1.5% of GDP, and Gross International Reserves sufficient to cover at least three months of imports.

SOURCE: CITI NEWSROOM