Ghana’s annual inflation rate dropped to 18.4% in May 2025, the lowest since February 2022, continuing a five-month disinflation trend that analysts attribute to cedi stability, restrained public spending, and easing food price pressures.
The year-on-year decline marks a 2.8 percentage point drop from April’s 21.2% rate, according to the Ghana Statistical Service. On a monthly basis, inflation stood at 0.7%, slightly below April’s 0.8%, reinforcing short-term price stability.
The Consumer Price Index (CPI) for May rose to 260.5 from 258.6 in April, with significant moderation observed in both food and non-food inflation. Food inflation eased to 22.8% from 25.0% the previous month, while non-food inflation dropped sharply to 14.4% from 17.9%.
Core inflation, a metric that excludes volatile items, fell to 18.5%, suggesting that underlying price pressures are softening. Goods inflation remained elevated at 20.1%, outpacing services inflation, which stood at 14.3%.
The overall trend shows sustained disinflation, possibly being influenced by the strengthened cedi, tighter monetary policy, fiscal consolidation, and positive market sentiments.
Food Remains Key Driver of Headline Inflation
Food items continued to dominate the basket, contributing nearly two-thirds of the headline rate. Top contributors included yams, smoked herring, fish, vegetable oil, and ginger, mostly staples in local diets.
Non-durable goods were also significant drivers, contributing 10.1 percentage points to the total 18.4% headline figure. Locally produced goods saw greater disinflation than imported ones, declining by 3.5 and 1.3 percentage points respectively.
Regional Disparities Persist
Despite the overall decline, regional disparities remain stark. The Upper West Region recorded the highest year-on-year inflation at 38.1%, driven by elevated food, education, and utility costs. The Ahafo Region reported the lowest at 14.5%.
Monthly regional figures also varied, with Bono Region registering the highest month-on-month inflation at 1.3%, while Volta posted a slight decline at -0.2%.
Implications for Households and Businesses
With food accounting for a large portion of inflation, the Ghana Statistical Service advised households to consider bulk buying, rely more on local and in-season produce, and reduce discretionary spending. For businesses, the easing of locally sourced inflation suggests an opportunity to cut costs by strengthening local supply chains. Consumers will be expecting the gains to reflect in the markets.
Policy Recommendations Focus on Food Systems, Social Protection
The report calls on the government to maintain macroeconomic stability, expand social protection in high-inflation regions, and invest in food storage, transport, and irrigation. It also encourages continued coordination between monetary and fiscal policy to manage inflation expectations.
If current trends hold, Ghana could be on track to bring inflation closer to the Bank of Ghana’s single-digit target, although analysts remain cautious about external shocks, global oil price volatility, and domestic supply constraints.
