Ghana Consumer Inflation Slows for Second Month in February

Ghana's consumer inflation has shown signs of easing for the second consecutive month, with the annual inflation rate dropping to 23.5% in February 2025, according to data released by the Ghana Statistical Service. This marks a 0.3% percentage point decline from the January 2025 figure of 23.8%. Although the inflation rate remains well above the Bank of Ghana's target band of 6% to 10%, the recent slowdown offers a glimmer of hope for the Ghanaian economy.



The deceleration in overall inflation was largely driven by a decline in non-food prices, which fell to 19.2% in February from 20.3% in January. In contrast, food inflation increased slightly to 28.3% from 27.8% in the same period. The recent stabilization of the Ghanaian cedi, which depreciated by only 0.6% against the dollar in February, has likely played a role in this trend. A stable currency reduces the cost of imports, thereby easing inflationary pressures.

The slowdown in inflation can be attributed to several factors, including the government's efforts to manage the fiscal deficit, the successful restructuring of Ghana's debt, and the stabilization of the Ghanaian cedi. The government has been implementing measures to improve revenue collection, reduce wasteful spending, and implement structural reforms to enhance fiscal sustainability. Additionally, the successful debt restructuring has helped alleviate pressure on the cedi, contributing to its stabilization.

However, the sustainability of this trend depends on several factors, including the government's ability to maintain fiscal discipline, the success of ongoing debt restructuring efforts, and the global economic outlook. If these factors remain favorable, the deceleration in inflation could be sustained. However, any setbacks in these areas could lead to a reversal of the trend.

In conclusion, the recent slowdown in Ghana's consumer inflation offers a positive development for the Ghanaian economy. The government and central bank should continue to implement measures to support the cedi's strength and manage inflationary pressures. By doing so, they can help stabilize the economy and promote sustainable growth.