Ghana’s Inflation Drops Slightly to 23.1% in February 2025

The slight drop in inflation has been attributed to:

• Lower food prices: A slowdown in the increase of food prices, particularly for grains, vegetables, and dairy products.
• Stable fuel costs: A relatively stable global oil market and local fuel price adjustments helped ease transportation costs.
• Improved currency performance: The Ghanaian cedi showed modest stability against major foreign currencies, reducing import-induced inflation.

Sectoral Breakdown

• Food Inflation decreased from 27.1% in January to 26.5% in February, driven by improved supply of key commodities.
• Non-Food Inflation remained relatively stable at 20.3%, reflecting controlled price increases in transport, housing, and utilities.

Economic Outlook and Expert Reactions

While the marginal drop is a positive indicator, economists warn that inflation remains high, posing challenges to household purchasing power and business operations. The Bank of Ghana (BoG) has maintained a tight monetary policy stance, keeping interest rates high to curb inflation further.

Speaking on the development, Dr. Ernest Addison, Governor of the BoG, noted that sustained efforts in fiscal discipline and economic reforms are needed to achieve long-term price stability.

Public and Market Reactions

Businesses and consumers remain cautiously optimistic, with traders hoping for further price reductions in the coming months. However, concerns persist over the high cost of living and interest rates, which continue to strain small and medium-sized enterprises (SMEs).

With global economic uncertainties and local fiscal challenges, Ghana’s economic managers face the task of sustaining the downward inflation trend while ensuring economic growth.