Inflation Drops to 3.8% in January 2026

By Praisebell Rosemond Larbi

Ghana’s inflation rate fell sharply to 3.8 per cent in January 2026, marking the 13th consecutive monthly decline and the lowest inflation reading since the rebasing of the Consumer Price Index (CPI) in 2021, according to the latest data released by the Ghana Statistical Service (GSS).

The January figure represents a significant slowdown from the 5.4 per cent recorded in December 2025, reinforcing signs that inflationary pressures in the economy have eased substantially following a prolonged period of macroeconomic adjustment.

Data from the CPI release show that the Consumer Price Index rose to 262.3 in January 2026, from 252.6 in January 2025, translating into a year-on-year inflation rate of 3.8 per cent. This reflects a 19.7 percentage-point drop from the 23.5 per cent inflation recorded in January 2025, underscoring the scale of the disinflation achieved over the past year.

On a month-on-month basis, inflation stood at 0.2 per cent, indicating that prices rose only marginally between December 2025 and January 2026. Analysts say the subdued monthly increase suggests that price stability is becoming more entrenched, rather than being driven by one-off base effects.

Food and Non-Food Inflation Continue to Ease

The data show a broad-based decline across major inflation components. Food inflation slowed to 3.9 per cent year-on-year in January 2026, down from 4.9 per cent in December 2025, reflecting improved food supply conditions and easing transport and distribution costs.

Non-food inflation also declined sharply, falling to 3.9 per cent from 5.8 per cent over the same period. Despite the year-on-year easing, non-food prices rose by 0.4 per cent on a month-on-month basis, suggesting that some cost pressures remain, particularly in utilities, housing-related services and transport.

Inflation for goods moderated further to 3.6 per cent, while services inflation eased to 4.0 per cent, down from 4.5 per cent in December 2025. Services prices, however, increased by 0.3 per cent month-on-month, reflecting gradual adjustments in service-based costs.

Locally Produced Items Cheaper Than Imports

A notable feature of the January inflation data is the widening gap between locally produced and imported items. Inflation for locally produced goods slowed sharply to 2.0 per cent, compared with 4.3 per cent for imported goods.

Economists say this highlights the continued influence of import-related costs, including exchange rate pass-through and global price movements, even as domestic price pressures subside.

Regional Disparities Persist

Despite the overall improvement, regional disparities in inflation remain pronounced. The North East Region recorded the highest inflation rate at 11.2 per cent, while the Savannah Region posted the lowest at 2.6 per cent.

Officials attribute these differences largely to variations in food supply, transport costs, market access and local production conditions across regions.

Policy and Economic Implications

Analysts say the sustained disinflation strengthens the case for further easing of monetary conditions, following recent cuts in the Bank of Ghana’s Monetary Policy Rate. With headline inflation now well below the central bank’s medium-term target range, real interest rates remain highly restrictive.

The sharp decline in inflation is expected to ease pressure on household budgets and input costs for businesses, although experts caution that improvements in credit availability and lending rates will be critical for translating price stability into stronger private sector growth.

Overall, the January inflation data reinforce growing confidence that Ghana’s macroeconomic stabilisation efforts are yielding tangible results, setting the stage for a more supportive environment for investment, consumption and job creation in 2026.