Inflation Ticks Up for the First Time in More Than Twelve Months

In line with expectations, the headline inflation rate climbed for the first time in over fifteen months, as spillovers from the ongoing Middle East crisis began to hit Ghana’s domestic inflation outlook. The US-Iran conflict has pushed international crude oil prices to multi-year highs and disrupted some supply chains, raising concerns about emerging risks to global inflation. For most developing and emerging market economies, investors’ flight to safe-haven assets has led to deterioration in the value of local currencies, as imported items become relatively more expensive. The Ghanaian Cedi ended April with a year-to-date (YTD) depreciation of 6.57%, compared with a YTD appreciation of 3.74% over the same period last year.

Ghana’s headline inflation was reported at 3.4% at the start of the second quarter of the year, up from 3.2% at the end of the first quarter. Despite the uptick, the recent inflation print marked a sharp drop from a rate of 21.2% in April 2025. Month-on-month inflation, on the other hand, recorded the largest increase in more than twelve months, as prices on average jumped by 1.0% in April alone, up from 0.1% in March. Inflation over the medium term is expected to show some stability, hovering around its current level as the domestic economy continues to remain resilient in the absence of any external shocks.

Food inflation on a year-on-year basis extended its declining trajectory, having dropped from 2.3% in March to print at 2.2% in April, as some items such as Cereal products (-11.3%), Tea & other plant products (-4.9%), and Cocoa drinks (-3.5%) continued to record reductions in their prices. Month-on-month food inflation, on the contrary, underwent an increase, edging up from a deflation of 0.3% to print at 0.8%, largely driven by increases in the prices of Vegetables, tubers & plantain, Ready-made foods, and Fish & sea foods with inflation rates of 2.4%, 1.8%, and 1.0%, respectively.

Inflation on non-food and alcoholic beverages saw increases on both yearly and monthly scales, buoyed by rising pressures on transport costs. Yearly non-food inflation rose from 3.9% in March to a five-month high at 4.2% in April. Month-on-month food inflation rose from 0.3% in March to 1.1% in April. Transport, Restaurants & accommodation services, and Recreation, sport & culture came in as the biggest price drivers, recording inflation rates of 3.5%, 1.1%, and 1.0% in the current month alone.

Across the regions, the inflation rate ranged from -3.5% in the Savannah region to 9.5% in the North East region, whilst six regions recorded inflation rates above the national average. Inflation on locally produced items and imported items posted diverging movements, as that on local items fell from 4.9% in March to 4.7% in April, whilst that on imported items rose from -0.6% to 0.5% over the same period. For the goods and services categorization, inflation on Goods further edged down to 1.1% in April, down from 1.7% in March, whilst that on Services picked up from 7.2% in March to 9.6% in April.

The next sitting of the central bank’s Monetary Policy Committee is expected to be a crucial one, as the committee will be faced with the dilemma of attempting to carry on with its monetary policy easing cycle in the midst of the emergence of risks to the inflation outlook.