Ghana was in a full-blown economic crisis when it sought an IMF bailout in July 2022. It was a combination of pre-existing vulnerabilities and global shocks. It was also a combination of elevated fiscal deficits and mounting public debt brought on by the COVID-19 pandemic and Russia-Ukraine war.
The country by end-2022 was dealing with a 45% depreciation of the cedi against the dollar and inflation rising to a record 54% in December of that year. Ghana had no option than to confront the reality of a crisis that demanded decisive and coordinated reform.
The Bank of Ghana took bold measures to re-anchor monetary discipline. It tightened monetary policy and halted financing of the fiscal deficit which made inflation retreat to 23% two years after among other fiscal-side policies.
Fast forward to 2025, the current inflation trajectory is one of the most dramatic disinflation periods in the country’s recent history outperforming the government’s own 11.9% end-year projection.
Context
Just to give you some context. From January’s 23.5% rate to just 6.3% in November, the country has engineered an eleven-month disinflation streak that has pushed inflation to its lowest point since the Consumer Price Index was rebased in 2021.
The speed, scale and consistency of the decline is a major departure from the turbulence of 2022–2023, when price instability eroded household welfare, business confidence and fiscal planning.
The numbers tell a compelling story of an economy steadily regaining equilibrium. Headline inflation, which peaked at 22.4% in March, dropped sharply to 18.4% in May, then to 13.4% in June before entering single-digit territory in September at 9.4%. It was the first time in four years that the country has recorded single-digit inflation.
By November, the rate stood at 6.3%, signalling a near-complete reversal of the inflationary pressures that had destabilised the economy for more than two years.
This longest stretch of continuous disinflation recorded is also a turnaround from the volatility that defined the previous years. The data point to an economy steadily emerging from its most turbulent phase in a decade.
Food inflation
Food inflation, historically one of Ghana’s most volatile categories, played a decisive role in the broader decline. From 28.3% in January, food inflation fell consistently through the year, dropping to 16.3% in June, then to 11% in September, and ultimately reaching 6.6% in November.
Again for context, food inflation averaged 15.39% over the past decade, peaked at an unprecedented 61% in January 2023, and has only once been lower than current levels.
The sharp correction suffice to say is due to improved domestic food supply, easing transportation pressures, better market efficiency and a more stable exchange rate reducing imported food costs.
Non-food inflation
Non-food inflation on the other hand, followed a similar downward trajectory, falling from 21.2% in April to 6.1% in November. Here, stabilising fuel prices, moderated utility adjustments and suppressed transport cost volatility contributed to broad-based easing across non-food categories.
The symmetry of the decline across both food and non-food components indicates a structural and not temporary improvement in price behaviour.
Monetary policy actions
The Bank of Ghana’s monetary policy actions have underpinned much of the disinflation momentum. The central bank cut the policy rate by a cumulative 1,000 basis points across its last three decisions – 300 basis points in July, 350 in September, and another 350 in November bringing the benchmark rate down to 18%.
These significant cuts were made possible by improving inflation expectations, declining inflationary momentum, and a stronger Ghanaian cedi, which has rallied against major currencies.
With imported inflation falling and domestic cost pressures easing, monetary conditions have shifted decisively toward supporting growth without destabilising prices.
Regional disparities
Even as national inflation slowed in November, regional disparities remained pronounced. The North East Region recorded the highest inflation at 12.3%, indicating persistent supply chain challenges and market access constraints.
In contrast, the Savannah Region posted a marginal deflation of -0.02%, pointing to unusually weak demand and improved food crop harvests.
These divergences highlight deep structural differences in transportation networks, storage capacity and the resilience of local market systems.
Economic signals
The inflation turnaround sends strong signals about the economy’s underlying direction:
1. Macroeconomic stabilisation is taking hold -The sustained decline in inflation indicates that the policy measures introduced since 2023 including fiscal consolidation, tighter monetary controls and the rebuilding of reserves are repairing the foundations of the economy.
2. Purchasing power is slowly recovering – While price levels remain high relative to pre-pandemic years, slower inflation means households are no longer facing rapid month-to-month erosion of income.
3. Business planning is improving – Predictable costs and a stable currency give firms room to plan inventories, pricing strategies and expansion activities with greater certainty.
4. Monetary policy space is widening – With inflation falling well within the Bank of Ghana’s target band of 8% ±2%, policymakers may gain additional flexibility to stimulate credit and private-sector growth in 2026.
5. Investor confidence is gradually returning – The sharp disinflation strengthens the investment climate by reducing macroeconomic risk and signalling a return to policy discipline.
Guarding the gains
The sustained disinflation offers households an opportunity to better manage budgets, protect real incomes, and build financial buffers against potential future shocks. For businesses, the disinflation window presents a chance to strengthen local supply chains and optimise cost structures. Firms must be bold and pass on savings from cheaper inputs to consumers to support demand.
Well, Ghana’s journey from 23% to 6% inflation is a rare achievement in the current global environment. The inflation slowdown is only a demonstration that the country may be emerging from one of its most difficult macroeconomic periods. The convergence of declining food prices, a strengthening currency and sound monetary management has created a level of price stability unseen in years.
But the gains remain fragile. Risks linger. The uptick in month-on-month inflation in November suggests that price pressures have not entirely disappeared. Food supply remains vulnerable to weather-related disruptions and transportation bottlenecks.
Regional disparities suggest structural inefficiencies that could reintroduce volatility if left unaddressed. A sudden rise in global oil prices or slippage in fiscal discipline could also reverse recent gains. Maintaining the current stability will require disciplined fiscal management and deep investments in agriculture, storage and transport systems.
The 2025 inflation story only stands as a cautiously optimistic signal by which Ghana may be laying the groundwork for a more stable economic future. Long may it continue.
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