Ghana’s inflation slowed more than forecast in July, reaching its lowest level in almost four years and reinforcing the case for further monetary easing.
According to Government Statistician Alhassan Iddrisu, annual inflation fell to 12.1% in July from 13.7% in June, beating the 12.4% median estimate from Bloomberg’s economist survey.
On a monthly basis, consumer prices rose by just 0.7%, signaling a continued disinflation trend. The slowdown was broad-based, with food inflation easing to 15.1% from 16.3%, and non-food inflation moderating to 9.5% from 11.4%.
The drop in inflation gives the Bank of Ghana fresh room to cut interest rates further after its surprise 300 basis-point reduction last week to 25%.
A key driver behind the easing inflation has been the strong rally in Ghana’s currency. The cedi has appreciated 39% against the dollar so far in 2025, buoyed by rising global prices for cocoa and gold, Ghana’s major exports. This currency strength has helped reduce imported inflation and stabilize domestic prices. As of 12:34 p.m. On Wednesday, the cedi traded steadily at 10.55 per dollar in Accra.
This sharp currency appreciation, according to analysts, is offering the Bank of Ghana more flexibility to ease policy without stoking inflationary pressure. “It definitely strengthens the likelihood of sharper rate cuts in the second half of the year,” said Mark Bohlund, senior credit analyst at REDD Intelligence.
The central bank has signaled further easing is on the table, contingent on sustained disinflation. Governor Johnson Asiama noted the Monetary Policy Committee (MPC) will “continue to assess incoming data and likely reduce the policy rate further should the disinflation trend continue.”
The BoG now expects inflation to return to its 6%-10% target range by year-end, a significant revision from its earlier projection of March 2026. However, Bohlund cautions that the central bank must remain vigilant, as the impact of the cedi’s appreciation may fade next year. “While the BoG is likely to continue and possibly even accelerate its monetary easing, I still expect it to shift toward a more balanced monetary policy in 2026,” he said.
Outlook
With inflation cooling faster than anticipated and currency gains supporting stability, Ghana’s macroeconomic environment is shifting favorably toward a lower interest-rate regime.
If commodity prices remain elevated and the cedi sustains its strength, the BoG could take bolder steps at its next meeting on September 17.