BoG targets single-digit inflation by end of 2025
By Praisebell Rosemond Larbi
The Bank of Ghana (BoG) says it expects the country’s headline inflation to fall to single digits before the end of 2025, revising its earlier target of the first quarter of 2026.
According to the Central Bank, this upbeat forecast reflects firm monetary tightening, ongoing fiscal consolidation, and improved food supplies, which together have quickened the pace of disinflation.
The outlook assumes the economy avoids major external shocks or domestic disruptions in the coming months.
“We have seen a rapid disinflation over the past months, and we expect that to be sustained going forward,” said Dr Philip Abradu-Otoo, Director of Research at the BoG.
Dr Abradu-Otoo explained that at the start of 2025, the Bank projected single-digit inflation by early 2026.
“However, based on current developments in the economy, the Bank of Ghana has pushed this forward to the last quarter of 2025,” he noted.
The improved inflation outlook underpinned the Monetary Policy Committee’s (MPC) decision to cut the key lending rate by 350 basis points to 21.5 per cent, signalling confidence in the disinflationary trend.
Dr Abradu-Otoo stressed that the Central Bank remains committed to safeguarding monetary stability.
“The Bank of Ghana will definitely continue with what we are doing to ensure that things do not get out of hand,” he highlighted.
Dr Abradu-Otoo added that the BoG will maintain policy consistency and continue building foreign reserves to reinforce confidence in the cedi and guard against market volatility.
Responding to questions about the scale of the policy rate cut, Dr Abradu-Otoo emphasised that the MPC’s decision was data-driven.
“The decision was unanimous in terms of the need for the policy to be cut; however, the margin was based on a vote,” he indicated
All MPC members agreed that a reduction was appropriate, but the extent of the cut was determined through a vote, reflecting careful consideration of Ghana’s improving macroeconomic fundamentals.
