Ghana: Inflation slides in January
Latest reading: Inflation inched down to 23.5% in January, which followed December’s 23.8%. January’s reading marked the first moderation in inflation in five months and slightly undershot market expectations. That said, it was still more than double the upper bound of the Bank of Ghana’s (BOG) 6.0–10.0% target band. Looking at the details of the release, prices for housing and utilities grew at a more subdued pace, as did those for clothing and footwear. The opposite was true of prices for food and beverages and for transport.
Meanwhile, the trend was unchanged, with annual average inflation coming in at December’s 22.9% in January.
Lastly, consumer prices rose 1.72% in January over the previous month, below the 1.81% increase recorded in December. January’s result marked the weakest reading since October 2024.
Outlook: Our panelists expect inflation to trend down further in coming quarters as past interest rate hikes temper private spending growth. However, inflation will decline less quickly than in 2024 as the high base effect wanes. Moreover, our Consensus is for inflation to remain above the BOG’s target range until 2027, at which point it is seen falling to the upper bound.
Upside risks to the outlook linger and include stronger-than-expected domestic demand growth, hikes to water and electricity tariffs, and higher energy and food import costs resulting from a stronger USD amid geopolitical conflicts and U.S. protectionism.