Inflation falls below target floor in January

Latest reading: Consumer prices rose 3.8% in annual terms in January, following a 5.4% increase in the previous month. January's reading marked the 13th consecutive drop in inflation and the lowest level since the 2021 rebase. It is now below the Central Bank’s target range of 6.0–10.0%, leaving room for further monetary easing at the Bank’s next meeting in March. Relative to the previous month's data, there were milder price pressures for food and beverages (+3.9% in annual terms vs +4.9% in December), transport (-5.9% vs -5.0% in December), housing and utilities (+9.3% vs +11.8% in December), clothing and footwear (+4.8% vs +9.9% in December) and recreation and entertainment (+10.7% vs +12.7% in December). Finally, consumer prices increased 0.22% in January on a month-on-month basis, following a 0.91% rise in the prior month.

Panelist insight: EIU analysts commented on this year’s inflation outlook: “Looking ahead, we expect some softening in the cedi, periodic electricity and water tariff rises, and looser fiscal policies to boost growth and generate inflationary pressures during the course of the year and over the medium term. Nonetheless, we expect average inflation this year to hold at just above the 6% floor of the central bank's target band. […] However, upside risks to inflation will remain and we expect it to accelerate towards the upper end of the 6-10% target band over our 2026-30 forecast period, driven in part by faster economic growth (which hit 5.5% in the third quarter of 2025) as well as rising inflation expectations.”

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