Ghana has successfully resumed its disinflationary path in 2025, with a significant decline in headline inflation driven by tight monetary policy, a stronger currency, and improved macroeconomic conditions.
According to the World Bank Group’s 9th Economic Update on Ghana, this trend marks a positive shift after the disinflationary process stalled in 2024.
The report notes that headline inflation has been on a continuous decline since December 2024, reaching 13.7 percent in June 2025.
This six-month-long reduction reflects a broad-based easing of price pressures across core, food, and non-food categories.
“The decline was influenced by a tighter monetary policy rate of 28 percent, improved macroeconomic conditions, and a significant rebound of the currency,” the report states.
A key factor in this progress has been the strong performance of the Ghanaian cedi, which appreciated against all major currencies in the year to June 2025 — a dramatic turnaround from its struggles in previous years.
The cedi’s appreciation was supported by a combination of tight monetary policy, ongoing fiscal consolidation, and interventions by the Bank of Ghana (BoG) in the foreign exchange (FX) market, the report added.
The World Bank also acknowledged the crucial role of the BoG’s interventions in managing liquidity and supporting the currency.
However, it cautioned that such interventions “should be managed carefully to avoid distortions in the currency market and allow for a more flexible exchange rate regime.”
This advice underscores the need to strike a balance between maintaining stability and ensuring market efficiency.
The strong disinflationary trend and the rebound of the cedi are seen as positive indicators that Ghana’s stabilization and recovery reforms are taking hold.
This is giving the Mahama administration confidence to pursue its ambitious reform agenda aimed at restoring growth and achieving long-term fiscal sustainability.
Source: Myjoyonline