BoG Confident Inflation Will Continue to Ease Into 6–8% Band
The Bank of Ghana (BoG) has expressed renewed confidence that inflation will continue its downward trajectory towards the lower end of the central bank’s target range, following months of steady macroeconomic improvement across key indicators.
Addressing journalists at the 127th Monetary Policy Committee (MPC) press briefing in Accra, Governor Dr Johnson Pandit Asiama said headline inflation, which peaked at 23.5 per cent in January 2025, has now eased to 8.0 per cent as of October, returning to the bank’s central target for the first time in over four years.
“The decline has been broad-based, with both food and non-food inflation currently in single digits. And let me say, this is the first time since July 2021,” Dr Asiama noted.
He attributed the sustained decline to a combination of tight monetary policy, government fiscal discipline, improved food supply, and relative stability of the cedi. According to him, the Bank’s core inflation gauge which strips out energy and utility price movements has also slowed, signalling easing underlying price pressures across the economy.
“Price expectations by consumers, businesses, and the banking sector for the next year signal well-anchored inflation expectations. Our latest near-term forecasts show that inflation will continue to decline and settle between 6 to 8% by the end of the year,” he added.
Ghana’s improving price environment is unfolding alongside robust output performance. Official data show that the economy expanded by 6.3 per cent in the first half of 2025. Preliminary estimates from the Ghana Statistical Service further indicate provisional growth of 5.1 per cent in August, up from 4.9 per cent in the same period last year, driven largely by the services and agriculture sectors.
The BoG also highlighted a gradual rebound in private sector lending. Credit growth strengthened to 5.4 per cent in October, recovering from a contraction of 7.1 per cent in May. The central bank said the improvement reflects increasing confidence within the financial system and the impact of high positive real interest rates.
Dr Asiama’s assurance comes at a time of notable fiscal consolidation. Government recorded a fiscal deficit of 1.5 per cent of GDP in the first nine months of the year, well below the projected 3.2 per cent. Public debt has also declined sharply to 45 per cent of GDP, from 61.8 per cent at the end of 2024, largely due to improved debt management and the strengthening domestic currency.
The central bank says it will continue to monitor trends in inflation, exchange rate movements, and credit conditions as it prepares for its next policy meeting scheduled for 26–28 January 2026. Analysts expect the MPC to maintain a cautious stance as it seeks to balance price stability with measures to support growth.
