Ghana Inflation Falls to 9.4%, Economist Warns Against “Overstretching” the Fight

Ghana has recorded its first single-digit inflation in four years, as headline consumer prices slowed to 9.4% in September 2025, according to the Ghana Statistical Service. The milestone marks a significant victory in the country’s battle against soaring living costs, offering households and businesses some relief after years of double-digit price pressures.

While the achievement has been welcomed with optimism, experts are urging caution. Professor Peter Quartey, an economist at the Institute of Statistical, Social and Economic Research (ISSER), warns that chasing even lower inflation could backfire. He argues that aggressive policy tightening might weaken government spending, dampen economic activity, and hurt livelihoods.

“Some level of inflation is actually healthy,” Prof. Quartey told Citi Business News. “When the government is spending on projects like road construction, it puts money in people’s pockets. If we fight inflation too hard, we risk hurting that spending and slowing down the economy.” He stressed that the goal should be balance, not just pushing inflation numbers down.

According to him, developing economies like Ghana should aim for an “optimal inflation range” of 10–15%, which allows for growth while still maintaining price stability. “At 9.4 percent, we are in a safe zone. Driving it much lower could mean reduced public investment and a knock-on effect on jobs and social programs,” he explained.

The warning comes at a critical time, as policymakers weigh the next steps. With food inflation easing to 11% and non-food inflation at 8.2%, many expect the Bank of Ghana to cut interest rates further, offering cheaper loans for businesses and households. But Quartey’s remarks serve as a reminder that the fight against inflation is a balancing act—too much tightening could erode demand, stifle growth, and limit job creation.

source: citi newsroom