Ghana’s annual inflation eased to 5.4 percent in December 2025, marking the lowest rate since a consumer price rebasing exercise in 2021. Analysts say the sustained decline reflects strengthening currency and lower food prices, creating expectations that the Bank of Ghana may ease borrowing costs when it meets later this month. Government Statistician Alhassan Iddrisu described the drop as a “sustained shift toward price stability,” signaling improving macroeconomic conditions across the country.
Food inflation fell to 4.9 percent in December from 6.6 percent in November, while non-food inflation eased to 5.8 percent from 6.1 percent. On a monthly basis, the consumer price index rose by 0.9 percent, unchanged from November. “Lower food inflation directly eases pressure on household budgets,” Iddrisu said, highlighting slower price growth across cereals, vegetables, fish, and meat products. Without the rebasing exercise, December’s inflation would have been Ghana’s lowest in 23 years, according to Bloomberg data.
The broader economic picture is equally striking. Annual average inflation declined to 14.6 percent in 2025, down from 21 percent in 2024 and more than 30 percent in 2023. This marks a dramatic reversal from the peak of 54 percent in December 2022, when Ghana faced a severe currency and balance-of-payments crisis. Short-term price fluctuations, such as a 1.1 percent monthly rise in food prices due to seasonal factors, are expected, but analysts emphasize that long-term inflationary pressures are easing.
The disinflation trend has given policymakers confidence to relax emergency monetary measures. In 2025, the Bank of Ghana cut its benchmark rate by 1,000 basis points, from 27 percent to 18 percent, the lowest since April 2022. Inflation returned to the central bank’s target band of 6–8 percent in September, while the economy grew 5.5 percent in Q3, supported by agriculture and services. External support, including a recent $385 million disbursement from the IMF, has further bolstered investor confidence.
Underlying the disinflation is the remarkable performance of the Ghanaian cedi. The currency has appreciated 41 percent against the US dollar in 2025, making it Africa’s best-performing currency and reversing a decade-long trend of depreciation. The rebound has been driven by record gold prices, broad dollar weakness, and Ghana’s early repayment of a $709 million Eurobond. The strengthened cedi continues to underpin falling inflation and signals a brighter economic outlook for households and businesses alike.
source: Business day