Ghana: Weaker price pressures for food drive drop in inflation in March
Latest reading: Inflation came in at 22.4% in March, which was down from February’s 23.2%. March’s result marked the lowest inflation rate since October 2024. The slowdown was primarily driven by more moderate increases for food and beverage prices plus transport.
In addition, the trend pointed down, with annual average inflation coming in at 22.6% in March (February: 22.9%).
Finally, consumer prices rose 0.25% in March over the previous month, a smaller increase than the 1.30% increase logged in February. March’s result marked the weakest reading since August 2024.
Outlook: Our Consensus is for inflation to drop further by Q4 on the back of March’s 100 basis point hike in interest rates and April’s planned abolition of a tax on electronic transfers of money. However, price pressures will remain well above the regional average in 2025 as a whole. Recent favorable weather conditions pose a downside risk to inflation as planting season begins and fiscal measures further support the agricultural sector. Potential shocks to food output and Ghana’s high import dependency pose upside risks.
Panelist insight: Oxford Economics’ Leeuwner Esterhuysen commented on the outlook for inflation and monetary policy:
“Since peaking at 54.1%y/y in December 2022, Ghana’s inflation has moderated significantly. That said, inflation has not dropped below 20% y/y since March 2022. In this context the [central] bank’s [recent] decision reiterates its commitment to lowering inflation, which implies that additional rate hikes may be warranted if inflation does not moderate in the coming months.”