BoG projects inflation to reach target by end of 2025

The Bank of Ghana (BoG) expects headline inflation to decline to its medium-term target range of 8 ± 2 per cent by the end of 2025, supported by a stable exchange rate, tight monetary policy and continued fiscal consolidation.

In its latest Inflation Risk Assessment and Outlook report, the central bank said the disinflation process remains on track, reflecting sustained policy discipline and easing supply-side pressures across key food and non-food items.

According to the BoG, the steady decline in inflation is being driven by the combined impact of a stronger cedi, moderated global commodity prices and improved food supply conditions.

“Supply-side pressures have eased, reducing their contribution to food and headline inflation,” the report stated, adding that risks to inflation are now tilted to the downside.

However, the Bank cautioned that certain upside risks could slow the pace of disinflation.

These include global supply chain disruptions, rising geopolitical tensions, the recent 2.5 per cent upward adjustment in utility tariffs and the new 1.0 per cent energy levy on ex-pump prices, all of which could exert modest inflationary pressures in the short term.

Exchange Rate Stability Boosting Disinflation

The BoG noted that the cedi’s recent stability is expected to persist, supported by stronger external sector performance and increased foreign exchange inflows under the IMF-supported programme.

The country’s gross international reserves have also improved significantly, exceeding the Extended Credit Facility (ECF) target.

The central bank said this accumulation will “further aid the disinflation process” by helping to stabilise the currency and reduce imported inflation.

Exchange rate stability has been one of the key achievements of the policy mix adopted under the IMF programme, which combines tight monetary conditions with prudent fiscal management and structural reforms.

Monetary and Fiscal Tightening Paying Off

The BoG reiterated that its tight monetary policy stance, coupled with ongoing fiscal consolidation, continues to anchor inflation expectations.

These measures, along with stable global crude oil prices, are expected to help offset the residual risks to price stability.

“The combination of improved external buffers, stable fuel prices and continued policy tightening will support the attainment of the medium-term inflation target by end-2025,” the report emphasised.

Inflation Trends

The country’s year-on-year inflation eased to 9.4 per cent in September 2025, marking the ninth consecutive month of decline.

The latest drop was largely driven by a significant fall in food inflation, which has historically been a major driver of overall price increases.