Inflation to remain within medium-term target of 8 ± 2% – BoG
By Prsaisebell Rosemond Larbi
The Bank of Ghana (BoG) has projected that headline inflation will remain within the lower bound of its medium-term target of 8 ± 2 per cent, supported by disciplined monetary policy, fiscal consolidation, and strong external buffers.
According to the central bank, the inflation outlook reflects the combined impact of maintaining an appropriate monetary policy stance, ongoing fiscal adjustment measures, and adequate reserve buffers that have helped stabilise the macroeconomic environment and anchor expectations.
In its latest assessment, the Bank of Ghana noted that while the disinflation process is expected to continue, some upside risks remain. These include the possibility of upward adjustments in utility tariffs and potential spillover effects from price pressures linked to tariff developments in the United States, which could transmit through global supply chains.
Despite these risks, the central bank expressed confidence that continued policy discipline will help sustain price stability going forward.
“Notwithstanding these risks, the maintenance of an appropriate monetary policy stance, strong sterilisation efforts, ongoing fiscal consolidation, and adequate reserve buffers are expected to sustain the disinflation process,” the Bank stated.
Recent inflation data point to a sustained easing of price pressures. Headline inflation continued its downward trajectory, declining to 8.0 per cent in October 2025 from 9.4 per cent in September 2025. The disinflation trend persisted in November and December 2025, further reinforcing the central bank’s confidence in the outlook.
Underlying inflationary pressures have also moderated significantly. The Bank of Ghana’s core inflation measure, which excludes volatile items such as energy and utility tariffs from the consumer basket, fell to 7.4 per cent in October 2025, down from 8.8 per cent in September 2025. This decline suggests that broad-based price pressures across the economy are easing, rather than the slowdown being driven solely by temporary or seasonal factors.
In addition, inflation expectations remain well-anchored. Survey-based measures from banks, businesses, and consumers indicate growing confidence that inflation will remain stable over the medium term. According to the central bank, this reflects the credibility of recent policy actions and the continued easing of underlying inflationary pressures.
The Bank of Ghana has reiterated that price stability remains the primary anchor of its monetary policy framework. It stressed that sustaining low and stable inflation is critical to protecting purchasing power, supporting investment decisions, and reinforcing confidence in the broader economy.
Overall, the central bank’s outlook signals a shift from crisis management to consolidation, with policy consistency and discipline expected to play a central role in keeping inflation within target and safeguarding the gains achieved in macroeconomic stabilisation.
