The Bank of Ghana (BoG) has revised its inflation target for the end of 2025 downwards from 16% to 12%, signaling renewed monetary discipline amid improving macroeconomic conditions.
Governor of the Central Bank, Dr. Johnson Asiama, unveiled the new target during an interview at the ongoing IMF/World Bank Spring Meetings, highlighting the impact of recent monetary policy adjustments and complementary fiscal reforms.
“Given developments in the foreign exchange market, the recent policy tightening, and steps taken to address food inflation, we are confident of steering inflation lower,” Dr. Asiama stated.
He reaffirmed the Central Bank’s commitment to data-driven decision-making, noting that the upcoming Monetary Policy Committee (MPC) meeting, scheduled for May 22, would further refine policy responses as needed.
The BoG’s optimism comes on the heels of encouraging inflation data. Headline inflation eased to 22.4% in March 2025, marking the third consecutive monthly decline and offering a glimmer of hope for policymakers aiming to tame the price surge that has gripped the economy over the past few years.
In its latest decision, the MPC hiked the policy rate by 100 basis points to 28%, reinforcing its aggressive stance against inflationary pressures. Analysts widely expect another rate increase in May, as the Central Bank ramps up efforts to meet the ambitious 12% year-end target.
The International Monetary Fund (IMF), which recently reached a staff-level agreement with Ghana under the Extended Credit Facility programme, has thrown its support behind the BoG’s tightening path. The IMF noted that the combination of firm monetary policy and fiscal consolidation should drive inflation lower in the coming quarters.
However, external observers remain cautious. The IMF projects Ghana’s inflation to end 2025 at around 17.5% higher than both the BoG’s new target and the 11.9% projection set by Finance Minister Dr. Ato Forson in the 2025 National Budget. Dr. Forson maintains that single-digit inflation remains achievable in the medium term as part of broader efforts to entrench macroeconomic stability.
Still, some economists warn that achieving the revised target will not be without challenges. Professor Peter Quartey, Director of the Institute of Statistical, Social and Economic Research (ISSER), urged prudence, citing structural weaknesses and global economic uncertainties that could derail efforts.
“While the downward trend is encouraging, attaining inflation as low as 12% within the year would require sustained discipline on both the monetary and fiscal fronts, as well as favourable external conditions,” Professor Quartey said.
