Inflation Ends First Half of the Year at a Three-Year Low

The inflation rate looked set to fall into the Bank of Ghana’s medium-term inflation target band of 10±2% in the second half of the year after the inflation rate ended the first half with a significant drop from the previous month. Consumer price statistics released by the Ghana Statistical Service revealed that the inflation rate sustained its sharpest drop yet in 2025, falling by 4.7 percentage points to 13.7% in June, its lowest in more than three years. The ongoing disinflationary trend, which began at this year’s opening, has so far seen the inflation rate drop by 10.1 percentage points in the first half of the year.

The month-on-month inflation reading showed that consumers paid comparatively lower prices for goods and services in June than in May, as June came in with a deflation rate of 1.2%, down from an inflation rate of 0.7% in May. The slowdown in both the headline and monthly inflation readings came largely on the back of the Cedi’s recent appreciation and onward stability, as well as a drop in the prices of petroleum products and subsequent cuts in transportation costs. It is expected that the inflation rate will hit a single digit before the close of the year, barring any major fiscal slippages and shocks to international crude oil prices.

Food inflation, although continued to remain higher than that of non-food inflation, recorded its fifth consecutive drop to 16.3% in June, down from 22.8% in the previous month. Month-on-month food inflation slowed down from 0.9% to record deflation of 0.5%, with twelve out of the observed fourteen food items showing price decreases between May and June. Cereal products and live animals at -2.7% and -1.2% recorded the biggest drops in their monthly readings.

The non-food inflation baskets printed at 11.4% in June, its sixth consecutive drop in 2025, having slowed down from 20.3 at the close of last year to 14.4% in May this year. All the observed sub-group items, except Housing & utilities, saw decreases in their yearly inflation readings, with Transport leading the decline with a deflation of 8.5%. Month-on-month non-food inflation moved down from 0.6% in May to -1.8% in June, with the majority of the items undergoing price decreases.

Across the regions, the inflation rate ranged from 8.4% in the Bono East region to 32.3% in the Upper West region. Inflation on locally produced items extended its massive downward trend as it fell to 14.0% in June from 19.2% in May. Inflation on import items also saw a decline, down from 16.4% in May to print at 12.5% in June.

The central bank’s Monetary Policy Committee is expected to meet later in the month, where pressure will be building on the committee to simmer down on its hard stance against inflation. The newly constituted committee hiked the policy rate in March, citing an elevated inflation outlook, and further upheld its decision in May. However, with this recent significant drop in inflation, the committee will be expected to revise its stance.