Ghana’s inflation rate has fallen for the eighth consecutive month to its lowest level in over four years, signaling a remarkable economic rebound under the country’s new administration.
The decline marks a significant shift from the double-digit price pressures that have burdened consumers and businesses in previous years.
Government statistician Alhassan Iddrisu reported that prices fell 1.3% month over month, bringing annual inflation down to 11.5% in August from 12.1% in July.
This fall reinforces a broader disinflationary trend that has been building since early 2025.
The moderation in inflation spans multiple sectors, with food inflation declining to 14.8% in August from 15.1% the previous month, and non-food inflation falling to 8.7% from 9.5%.
The trend reflects a recovery that began when inflation exceeded 20% earlier this year.
In May, inflation fell to 18.4% from 21.2% in April, then to 13.7% in June, driven largely by a surge in gold prices that boosted foreign exchange earnings and stabilized the cedi.
Ghana has benefited from rising global commodity prices, particularly for gold and cocoa, two of its main exports. The inflow of foreign currency has strengthened the cedi, which has appreciated 23% against the U.S. dollar this year.
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A stronger local currency has reduced import costs, helping lower consumer prices, Bloomberg reported.
Following a six-day decline, the cedi traded largely unchanged at 11.95 per dollar in Accra. Overall, the currency trend has supported disinflation, a stark contrast to 2022 and 2023 when a weakening cedi drove import-related price pressures.
The positive trajectory is linked to policies implemented by President John Mahama’s government, which has focused on fiscal discipline, currency stability, and export growth.
These reforms, combined with favorable external conditions, have allowed the economy to recover from years of turmoil.
The disinflationary environment has given the Bank of Ghana room to maintain a restrictive monetary policy aimed at reducing inflation and restoring economic confidence.
In July, the central bank cut its key interest rate by 300 basis points to 25%, its first major step to lower borrowing costs in years.
With inflation at 11.5%, near the bank’s revised year-end target of 12%, economists expect another rate reduction at the next Monetary Policy Committee meeting on September 17.
Deloitte projected in July that Ghana could achieve single-digit inflation by the end of 2025, underscoring a “sustained disinflationary trend.”
For a country recently buffeted by inflationary shocks, reaching this milestone would mark a major economic achievement.
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