Inflation to Trend at Lower End of 8 ± 2% Target in 2026 – BoG
Headline inflation is projected to trend at the lower end of the medium-term target band of 8 ± 2 percent in 2026, the Bank of Ghana (BoG) has forecast.
According to the Central Bank’s January 2026 Monetary Policy Report, the outlook reflects the combined impact of an appropriate monetary policy stance, sustained fiscal consolidation, and strengthened external reserve buffers.
The report noted that underlying inflationary pressures continued to ease toward the end of 2025.
“The Bank’s core measure of inflation, which excludes energy and utility items from the consumer basket, declined to 4.6 percent in December 2025, down from 5.4 percent in November 2025. Inflation expectations, based on surveys of banks, businesses, and consumers, also remained well-anchored, reflecting the continued easing of underlying inflationary pressures,” the report stated.
Improving Macroeconomic Conditions
At its most recent meeting, the Monetary Policy Committee (MPC) observed marked improvements in macroeconomic conditions, including anchored inflation expectations, stronger external buffers, and renewed confidence in the economy.
The Committee further projected that headline inflation would trend below the midpoint of the 8 ± 2 percent target band in the first quarter of 2026, reinforcing confidence in the ongoing disinflation process.
However, policymakers cautioned that potential upward adjustments to utility tariffs and uncertainties in global trade conditions could present upside risks to the inflation outlook.
“Notwithstanding this, maintaining an appropriate monetary policy stance, strong sterilisation efforts, ongoing fiscal consolidation, and adequate reserve buffers are expected to sustain the disinflation process going forward,” the Committee noted.
Policy Rate Cut to Support Growth
In line with the improving inflation outlook, the Committee voted by majority to lower the Monetary Policy Rate by 250 basis points to 15.50 percent.
The rate cut signals confidence in the durability of the disinflation trend while also supporting economic activity through lower borrowing costs.
Going forward, the Committee indicated it will continue to closely assess incoming data and adjust policy as necessary to reinforce price stability and sustain macroeconomic gains.
The latest projections suggest Ghana’s inflation trajectory is stabilising within target, marking a significant turnaround from previous periods of elevated price pressures and positioning the economy for more stable growth in 2026.
