Ghana: Inflation recedes in February
Latest reading: Inflation ticked down for the second month running in February to 23.2%, following January’s 23.5%. A higher base of comparison, a more stable cedi and improved supply chains were behind the slowdown. Looking at the details of the release, the moderation was largely driven by slower growth in prices for food and beverages. Moreover, prices for housing and utilities grew at a more subdued pace.
Still, the trend was unchanged, with annual average inflation steady at January’s 22.9% in February.
Lastly, consumer prices rose 1.30% in February over the previous month, moderating from the 1.72% increase recorded in January. February’s result marked the weakest reading in four months.
Outlook: Our Consensus is for inflation to trend down further through Q4 2025 on past interest rate hikes and a high base of comparison. Softer private consumption growth and a more stable currency will push price pressures down further. That said, our panelists see inflation overshooting the upper bound of the Bank of Ghana’s 6.0–10.0% target band until 2026; moreover, 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.
Meanwhile, January and February’s data, coupled with the recent stability of the cedi, might persuade the Bank of Ghana to resume its loosening cycle and reduce interest rates when it reconvenes on 25–28 March.