Fiscal Discipline Key to Sustaining Inflation Gains – Government Statistician
By Praisebell Rosemond Larbi
Government Statistician, Dr. Alhassan Iddrisu, has cautioned that Ghana’s impressive inflation achievement, now at a four-year low of 8.0 percent as of October 2025, can only be sustained through fiscal discipline, rationalized spending, and consistent policy implementation.
Speaking at a post-release briefing of the October Consumer Price Index (CPI) in Accra, Dr. Iddrisu said Ghana’s journey from an inflation rate of 23.8 percent in December 2024 to single digits within less than a year reflects “purposeful fiscal management and deliberate coordination between fiscal and monetary authorities.”
He explained that the progress was driven by a combination of tight expenditure controls, enhanced domestic revenue mobilization, and reduced government borrowing, which helped ease inflationary pressures across key sectors of the economy.
“Fiscal consolidation means the government is collecting more revenue while rationalizing expenditure to reduce wasteful spending. This ensures that borrowing is minimized and fiscal stability is maintained,” Dr. Iddrisu stated.
According to him, Ghana’s primary balance on a commitment basis stood at a positive 1.1 percent of GDP, meaning government revenues now exceed non-interest expenditures, a strong signal of improving fiscal health and sound management.
Institutional Reforms Strengthening Fiscal Credibility
Dr. Iddrisu cited reforms such as the Fiscal Responsibility Act, which mandates a minimum positive primary balance of 1.5 percent of GDP, as key to anchoring long-term discipline. He also revealed that the establishment of an Independent Fiscal Council is underway to enhance transparency and accountability in public spending.
“These institutional frameworks ensure that fiscal discipline becomes a permanent feature of Ghana’s economic governance, adding that the goal is to insulate national fiscal policy from short-term political pressures,” he said.
Collaboration with the Bank of Ghana
The Government Statistician also credited the Bank of Ghana’s prudent monetary policy and effective coordination with the Ministry of Finance for anchoring inflation expectations and stabilizing the cedi. The Ghana Statistical Service (GSS) report further pointed to improved food supply, easing fuel prices, and falling global commodity costs as complementary factors supporting the disinflation trend. However, he warned that fiscal slippages, particularly excessive spending or weak revenue performance, could easily derail the hard-won progress.
“Maintaining fiscal discipline is non-negotiable. Any deviation from this path can undo the progress made so far,” he cautioned.
Outlook for 2026
Looking ahead, Dr. Iddrisu said Ghana could maintain stable single-digit inflation through 2026, provided government adheres to its fiscal plans, continues strengthening domestic tax collection, and avoids external shocks.
He praised the ongoing cooperation between fiscal and monetary authorities, describing it as “vital for sustaining macroeconomic stability and investor confidence. The lesson is clear fiscal prudence is not just a target, it is the foundation for lasting stability,” he concluded
