After the Ghana Statistical Service (GSS) announced that Ghana’s inflation rate dropped to 5.4% at the end of 2025, the conversations in the trotro, the market, and even on social media are that, but we are not seeing it.
The expectation is that with the low inflation, prices should fall. Markets should be cheaper. Transport fares should go down. Food should cost less.
However, that expectation, though understandable, is not how inflation works.
The confusion has been made worse by political communicators who loosely suggest that falling inflation means falling prices. It sounds comforting, but economically, it is wrong.
Here is the kicker: the 5.4% inflation means prices are still rising in Ghana. They are just rising more slowly than before.
What Inflation Really Means
Inflation is not about prices falling or rising once. It is about how fast prices are changing over time. A higher inflation means prices are rising faster, while a lower inflation means prices are still rising, but at a slow pace.
For instance, when inflation was 54%, as it was in 2022, prices were rising very fast.
Now that inflation is 5.4%, prices are rising slowly. So, inflation at 5.4% does not mean prices are coming down. It means prices are still going up, just not aggressively.
Think of inflation like the speed of a car.
At 120 km/h, the car is dangerously fast.
At 20 km/h, the car is still moving forward, just more safely.
The car has not stopped. It has not reversed. It has simply slowed down.
Inflation, Disinflation, and Deflation Explained Simply
This is where the confusion usually starts.
Inflation
Inflation means prices are increasing. Your money buys less over time.
Disinflation
Prices are still increasing, but at a slower rate. So when the drop in inflation from 54% in 2022 to 5.4% in 2025 means prices are rising, but at a slower rate.
Take the analogy of the car, if it were travelling at 120km/h in 2022, it is now travelling at 20km/h, yet it is still moving forward.
This is what Ghana is experiencing now.
Deflation
This is where Prices generally fall across the economy. For this to happen, it means the rate should be below zero or negative. This is rare and can even be dangerous because businesses may stop investing and workers may lose jobs.
Still using the car analogy, this time the car will be moving in reverse.
So Ghana’s 5.4 percent inflation is disinflation, a slow rise in prices, not deflation, an actual reduction in prices.
Why Some People Feel Prices Are Falling
Here is the part many people find confusing, but very important. Inflation is measured using a basket of goods. This basket includes food, transport, rent, clothing, utilities, education, healthcare, and many other items.
Each item has a weight, meaning some matter more than others.
For example, food has a big weight, and transport has a big weight. Things like newspapers or matches have small weights. If the price of tomatoes drops but transport fares rise, the overall basket may still become more expensive.
So yes, some prices can fall, and people will feel relief in those areas. But inflation looks at the average change across the whole basket, not individual items.
This is why the Ghana Statistical Service data is accompanied by granular data on each of the items in the basket and how they are contributing to the overall inflation.
That is why one person may say, “Things are cheaper now,” while another says, “Nothing has changed for me.” Both can be right.
The Bottomline
The 5.4 percent inflation rate does not mean prices are reducing. It means the painful surge in prices has slowed down. The fire is no longer raging, but the room is still warm. Understanding this difference helps manage expectations and keeps the public conversation honest. Prices are not falling yet, but at least they are no longer running away.
