Ghana’s inflation rate fell sharply to 3.8 percent year on year in January 2025, marking its first dip into single digit territory since the height of the country’s recent economic crisis.
The figure, released by the Ghana Statistical Service, represents a significant decline from the 5.4 percent recorded in December and the 13th consecutive month of disinflation, solidifying the return of price stability.
Government Statistician Alhassan Iddrisu stated the outcome reflects a broad-based moderation, with food inflation falling to 3.9 percent as the largest contributor to the drop.
He said the sustained decline signals Ghana is firmly on a path towards price stability, noting this is the lowest rate since the Consumer Price Index was rebased in 2021.
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This progress follows a period of severe economic distress. Inflation had peaked at a historic 54.1 percent in December 2022, driven by currency depreciation, soaring debt, and fiscal pressures, which ultimately led Ghana to default on parts of its sovereign debt.
A combination of fiscal consolidation, exchange rate stabilisation, and tight monetary policy has since driven the rapid turnaround. The Bank of Ghana has cut its benchmark policy rate by a cumulative 12.5 percentage points since July 2024, with the most recent reduction bringing it to 18 percent.
Despite the inflation rate now sitting well below the central bank’s 8 percent target, authorities remain cautious. Governor Johnson Asiama noted it is too early to reassess the official inflation target, emphasizing the need for gains to be durable as the country continues its three-year International Monetary Fund support programme.
