Inflation is expected to witness another sharp decline in June 2025, falling to 16%, according to IC Research.
The anticipated drop is attributed to favourable foreign exchange pass-through and lower energy prices.
“The June 2025 CPI data window recorded a 29.5% month-on-month and 35.3% year-on-year appreciation of the Ghanaian cedi against the US dollar. This exerted downward pressure on prices of imported items with notable declines in petroleum prices and transport fares. The announced 15.0% reduction in commercial transport fares will continue to restrain transport inflation with downside spillovers for other items,” IC Research explained.
“Additionally, we estimate that the lower transport cost likely eased the month-on-month pressure observed for vegetables and tubers last month, potentially sustaining food disinflation in June. Consequently, we forecast a 240 basis points decline in the June 2025 annual inflation to 16.0%, with the month-on-month rate at 0.8%,” the report added.
Headline inflation decelerated by 280 basis points to 18.4% year-on-year in May. This marked the fifth consecutive monthly decline and brought the cumulative drop in headline inflation to 540 basis points in the first five months of 2025, compared to just 10 basis points in the same period in 2024.
According to IC Research, the rapid disinflation reflects a strong base effect, the favourable impact of the cedi’s recent appreciation, and declining petroleum product prices.
Food Inflation
Food inflation continued its downward trend, slowing by 220 basis points to 22.8% in May 2025. This was mainly due to a favourable base effect in the heavily weighted CPI basket for vegetables and tubers, which offset increases in prices of fish and other seafood.
Inflation for vegetables and tubers fell sharply by 10.3 percentage points to 24.0% year-on-year, although the month-on-month rate rose to 2.4% due to the ongoing planting season.
Non-food Inflation
Non-food inflation dropped significantly by 350 basis points to 14.4% year-on-year, continuing a seven-month streak of decline.
“Notably, we observed declines across 10 out of the 12 divisions of non-food inflation, with the weightier transport inflation tumbling by 11.8 percentage points to 3.1% year-on-year as the cedi’s appreciation ignited a reversal in energy prices with a domino effect,” IC Research concluded.
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