The significant drop in inflation has created a golden opportunity for the Bank of Ghana (BoG) to consider slashing the country’s policy rate to offer relief to businesses. This is the view of economist and political risk analyst, Dr. Theo Acheampong.
Latest Consumer Price Index (CPI) figures released by the Ghana Statistical Service (GSS) announced that Ghana’s inflation has fallen sharply to 13.7% in June 2025, from about 18% in the previous month.
This is the most significant drop in months. For Dr. Theo Acheampong, aside from cooling the cost of living pressures, it is also creating the perfect runway for the BoG to ease the monetary policy rate.
In his view, the huge drop in inflation warrants at least a 100basis points reduction in the policy. This means the policy rate, which currently stands at 28% could drop to 27% if the 100bp reduction proposed by the economist is applied.
He emphasized that such a move would not only ease the cost of borrowing for businesses and households but could also lead to a much-needed drop in lending rates and overall cost of living, a welcome relief for millions of Ghanaians battling economic pressure in recent years.
“The drop in inflation should give the Bank of Ghana Monetary Policy Committee (MPC) room to cut the policy rate a few notches down by at least 100 basis points and further during the course of the year on improved inflation expectations, the economist suggested.
He added that, “Ghanaians could see this in improved cost of living and bank lending rates also coming down in the coming months.”
Driven by consistent declines in both food and non-food inflation, and supported by a steadily appreciating cedi and improved external dynamics, the latest inflation figure signals renewed macroeconomic stability and room for decisive monetary easing.
Dr. Acheampong, a leading economist, believes the Bank’s Monetary Policy Committee (MPC) now has “ample space” to reduce the policy rate by at least 100 basis points in the short term, with more cuts expected later in the year should inflation expectations continue to ease.
The drop in inflation is welcome news for many analysts who believe the June inflation is likely to boost confidence in the economy, trigger lower yields on Treasury instruments, and sustain positive investor sentiment, especially as the Bank of Ghana aims to balance inflation targeting with growth support in the months ahead.
