Leading market research firm IC Research forecasts a further drop in inflation for the month of November, contrary to the trend that sees inflation go up in the last quarter of most years.
The Research firm argues that the combined effect of the strong Cedi and the base effect will dramatically accelerate the disinflation process.
The firm anticipates headline inflation will drop sharply to 6.5% in November 2025 (-150 basis points month-on-month). This trajectory places inflation firmly within the Bank of Ghana’s (BoG) target band and signals the potential for the rate to stabilize near the lower bound of 6%.
Ghana’s economic stabilization efforts received a major boost in October 2025, as annual headline inflation continued its disinflation trend for the tenth straight month, landing precisely at 8.0% year-on-year (YoY). This marks the lowest inflation print recorded since June 2021, strengthening investor confidence and setting the stage for significant monetary policy easing.
Key Drivers and the Inflation Breakdown
The sharp decline was primarily driven by two key factors: a strong, favourable base effect (comparing current prices to much higher levels from a year ago) and the recent sharp appreciation of the Ghanaian Cedi, which reversed upward pressure on imported goods like fuel.
The moderation was evident across all components of the Consumer Price Index:
- Food Inflation successfully returned to single digits for the first time since July 2021, declining by 150 basis points to 9.5% YoY. This was attributed to disinflation for items like fish and other seafoods, live animals, and ready-made food.
- Non-Food Inflation slid even deeper into single digits with a 130 basis points decline to 6.9% YoY, reflecting suppressed prices across the non-food basket.
Impact of Hitting the Target
This positive forecast has significant implications for Ghana’s economy:
Policy Rate Reduction: IC Research expects the BoG to approve a cut in the policy rate. Such a reduction is critical as it directly translates to lower interest rates for businesses and consumers.
Cheaper Credit: With inflation nearing the 6% mark, borrowing becomes cheaper, encouraging businesses to take on investment projects, creating jobs, and stimulating overall economic growth.
Increased Business Confidence: Sustained inflation control solidifies the stability of the Cedi and financial markets, making Ghana a more attractive destination for both local and foreign direct investment.
IC Research also noted that while the overall trend remains downward, month-on-month fluctuations are normal, reflecting immediate market conditions. Deflation observed in June and October reflects the impact of the Cedi’s appreciation, while the August deflation was attributed to the onset of the crop harvest.
