IC Research has revised Ghana’s end-2025 inflation forecast downward, citing stronger-than-expected disinflation momentum but warning that planned fuel and electricity price hikes could undermine the progress.
In its latest update, the firm now sees headline inflation ending 2025 in the range of 10.3% to 12.3% (midpoint 11.3%), down from its earlier projection of 11.8% to 13.8%. The more optimistic forecast is built on “the stronger pass-through of Cedi appreciation, a steeper-than-expected June disinflation and anticipated strong crop harvest in 3Q2025,” IC Research noted.
The firm also highlighted that the favourable base effect in the final quarter of 2025 could open the door to even lower price growth. “We see scope for further disinflation on the back of favourable base effect in 4Q2025, raising the possibility of single-digit inflation by year-end,” IC Research said, indicating that inflation could fall below 10% if trends hold.
However, the report strikes a cautious tone despite the positive momentum. Analysts at IC Research flagged two significant upside risks that could derail disinflation. “We opt to stay cautious due to potential risk from major electricity tariff hike in 4Q2025 and expected start of the suspended GHS 1.0/litre fuel levy on 16 July 2025,” the report warned.
The re-imposition of the suspended fuel levy is expected to directly increase transport and distribution costs, feeding through to the broader price basket. Meanwhile, the possibility of a sizeable utility tariff adjustment later in the year could compound cost pressures across sectors.
IC Research explained that while the recent cedi stability has helped ease imported inflation and food prices are set to benefit from a strong harvest, these policy-driven price increases could partially offset the gains.
“Despite the improved outlook, inflation risks remain skewed to the upside in the near term if these adjustments are implemented as planned,” the note added, underscoring that policymakers face a delicate balancing act between revenue needs and price stability.
The report comes after Ghana’s June 2025 inflation reading surprised markets with a sharper-than-expected slowdown, boosting optimism that monetary policy tightening and currency stability were having the desired effect. Analysts believe the Bank of Ghana will be watching these inflation dynamics closely ahead of its next monetary policy meeting.
While IC Research’s baseline scenario now anticipates inflation settling in the low double digits by year-end, the firm suggests that single-digit inflation is possible if the upside risks from fuel and power prices can be mitigated or delayed.
