Inflation Hits Single Digits for the First Time in Four Years

Ghana’s inflation eased into the single digits for the first time since July 2021, as the disinflation process accelerated after a slowdown over the past two months. Inflation ended the third quarter of the year well anchored in the Bank of Ghana’s medium-term inflation target band of 10.0% ± 2.0%, and beyond the government’s end-of-year inflation target of 11.9%. Consumer price statistics released by the statistical office have revealed that the inflation rate registered its ninth consecutive decline to print at 9.4% in September, down from 11.5% in the previous month.

The statistical office noted that the steady drop in inflation from a near two-year peak at 23.8% in December 2024 to its current level showed a sustained shift in prices, signaling that Ghana is firmly on the path to macroeconomic stability. Month-on-month inflation print, on the other hand, saw a jump in September to 0.9%, having risen from a deflation of 1.3% in August. The jump in the general price levels in September comes on the back of the Cedi’s recent difficulties, where the Cedi has lost at least 5.0% of its value in September alone, coupled with increases in the prices of petroleum products.

Food inflation posted its sharpest drop in the past three months in September, edging down to 11.0% from 14.8% in August. Vegetables, tubers & plantain with a deflation of 0.1% were among three other sub-group items that recorded rates lower than the group’s inflation mark. Month-on-month food inflation failed to build on the general price reductions registered in August, where a deflation of 2.5% was recorded. Monthly food inflation in September climbed up to 0.6% with some items such as Fish & other sea products and Dairy products sustaining over 100% increase in their respective inflation readings.

The pace of decline in the non-food inflation rates slowed down further in September to print at 8.2%, down from 8.7% as some items such as Transport, Recreation & sport, Education, and Housing & utilities began to record increases in their general price levels. Month-on-month no-food inflation rose from a deflationary mark of 0.1% to print at an inflationary mark of 1.1% as all the sub-group items saw increases in the general price levels.

Across the regions, the inflation rate hovered between 1.2% in the Bono East region and 20.1% in the North East region. After posting a much slower decline in August, inflation on both local and imported items fell by comparatively bigger margins in September, posting a decline from 12.2% and 9.5% in the previous month to print at 10.1% and 7.4%, respectively.

The central bank’s Monetary Policy Committee (MPC) at its September sitting handed down a historic policy rate cut, slashing the policy rate by 350 basis points to 21.5%, down from 25.0%, with the committee warning that it will continue to monitor macroeconomic developments and will take the appropriate policy decision as and when necessary to reinforce the disinflation process. Despite the MPC being cautious over the impact of a possible upward review of utility prices on the inflation outlook, its decisions were widely based on the current state of some key macroeconomic variables.