Ghana's economic recovery picks up pace, inflation at five-year low

Ghana's consumer inflation slowed further to 3.8 percent in January, extending a 13-month disinflation streak and reaching its lowest level since the consumer price index was rebased in 2021, official data showed.

Prices rose just 0.2 percent month-on-month, according to the Ghana Statistical Service, reflecting broad easing across both food and non-food items.

Food inflation slowed to 3.9 percent year-on-year, while non-food prices fell by 0.4 percent compared with the previous month.

Softer price pressures in recent prompted a policy shift from the Bank of Ghana, which cut last week its benchmark interest rate by 250 basis points to 15.50 percent in a bid to support economic growth while maintaining price stability.

Stronger currency

The steady decline in inflation has been underpinned by a stronger cedi, lower import costs and improved food supply, alongside tighter monetary policy over the past year and fiscal reforms tied to Ghana's International Monetary Fund programme.

The currency's relative stability has reduced the cost of fuel, transport and imported goods.

Meanwhile easing global commodity prices and better domestic harvests have helped cool food prices, a key driver of household expenses.

Ghana, a major producer of gold and cocoa, is emerging from one of its worst economic crisis in decades, marked by soaring prices, debt restructuring and an IMF-backed recovery plan.

Lower inflation is expected to ease pressure on households and businesses, though policymakers have said they remain cautious.