Ghana Inflation Slows to Five-Month Low After Steep Rate Hike

AFRICAN BUSINESS AND ECONOMYApril 11, 2025 at 10:34 AM UTC

TLDR

Ghana’s annual consumer inflation slowed for a third consecutive month to 22.4% in March, down from 23.1% in February
The deceleration comes just a week after the Bank of Ghana raised its benchmark interest rate by 100 basis points to 28%
Governor Johnson Asiama has cautioned that inflation remains well above the central bank’s 8% ±2% target range and requires a tight policy stance

Ghana’s annual consumer inflation slowed for a third consecutive month to 22.4% in March, down from 23.1% in February, driven by easing food price pressures, according to the Ghana Statistical Service. “This is the lowest inflation rate recorded in the past four months,” said Government Statistician Samuel Kobina Annim. Food inflation saw a sharp drop, while non-food inflation declined marginally.

The deceleration comes just a week after the Bank of Ghana raised its benchmark interest rate by 100 basis points to 28%, surprising markets with a move aimed at reinforcing disinflation momentum. Governor Johnson Asiama has cautioned that inflation remains well above the central bank’s 8% ±2% target range and requires a tight policy stance.

Finance Minister Cassiel Ato Forson, speaking in March, projected that aggressive fiscal consolidation would help lower inflation to 11.9% by year-end.

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Key Takeaways

Ghana’s inflation slowdown provides some relief, but price growth remains well above target, reinforcing the central bank’s hawkish stance. The March rate hike to 28% underscores concerns over persistent inflationary risks, even amid moderating food prices. The government has committed to deep spending cuts to stabilize the macroeconomic environment, with a target of nearly halving inflation by December. Yet, risks remain, including currency pressures, imported inflation, and global commodity price volatility. For policymakers, balancing tight monetary policy with fiscal discipline will be key to restoring investor confidence and sustaining IMF-backed reform momentum. Financial markets will be watching closely for signs of policy effectiveness and consumer price stability heading into the second half of the year.

Ghana

Inflation

Interest Rate

Economy

Cedis

Samuel Kobina Annim

Central Bank