On the average, price reductions outweighed increases, in the month of June compared to May of this year, contributing to the continued decline in inflation that hit 13.7% in June 2025, the lowest recorded since the country’s 2022 economic crisis.
According to the Bank of Ghana’s July 2025 Summary of Economic and Financial Charts, both headline and core inflation have seen consistent declines, bolstered by a strong Ghana cedi and easing food prices.
Core inflation, which excludes volatile items such as food and energy, fell to 13.0% in June, reinforcing the narrative that disinflation is gaining traction across broader sectors of the economy.
The most telling indicator of this trend, however, is the monthly headline inflation, which dropped to -1.2% in June signaling deflation. This rare decline in the monthly inflation figure suggests that overall prices actually fell between May and June, offering some relief to consumers grappling with high living costs.
Food Prices Lead the Slowdown
The inflation slowdown is being driven mainly by food prices. Food inflation dropped to 16.3% in June 2025 from over 20% earlier in the year, while non-food inflation eased to 11.4%, continuing a multi-month decline.
Analysts attribute the drop to improved domestic food supply following a strong harvest season and better transport logistics. Government fertilizer subsidies and increased investment in irrigation have also helped stabilize food prices.
“This is encouraging and points to improving food security in the medium term,” said an economist at a local policy think tank.
Cedi Appreciation Plays a Key Role
The strengthening of the Ghana cedi has also played a significant role in slowing inflation. As of July 2025, the cedi has appreciated by 40.7% against the U.S. dollar, 31.2% against the British pound, and 24.2% against the euro on a year-to-date basis. The local currency now trades at GHS 10.45/USD, marking a significant rebound from its weaker levels in 2023 and early 2024.
A stronger cedi helps reduce the cost of imported goods and services, including fuel and food, which feed directly into the inflation basket.
Monetary Tightening Maintained
Despite the easing inflation, the Monetary Policy Rate remains at 28.0%, reflecting the Bank of Ghana’s cautious stance amid global uncertainties and exchange rate volatility. The central bank is expected to hold rates steady until inflation settles firmly within its medium-term target range of 6%–10%.
With the average lending rate still at 27.0%, borrowing remains expensive, especially for small businesses and households. The gap between headline inflation and lending rates, however, means that real interest rates have turned positive, encouraging savings and restoring some confidence in the banking system.
What’s Next?
While the trend is promising, experts warn that inflation risks remain. “Any shocks to food supply, energy prices, or global commodity markets could reverse these gains,” cautioned a financial analyst.
Nonetheless, with inflation down, the cedi up, and deflation setting in for the first time in months, Ghana appears to be entering a more stable macroeconomic phase, a welcome development for consumers, businesses, and policymakers alike.
