Inflation Inches Closer to the Lower Bound of the Target Band in September

Inflation closed the third quarter, inching up for the second consecutive time as the domestic economy remained exposed to the ongoing geopolitical crisis. The protracted Middle East crisis continues to drive energy costs up while also disrupting key international supply chains. These events have inadvertently raised energy import bills of net crude oil importers, whilst also mounting pressure on weaker and volatile currencies, as traders and investors throng safe-haven assets. Ghana’s headline inflation rate was reported at 5.2% in September, registering a progress increase from a recent low of 4.6% in July 2026, and a significant increase from a record low of 3.2% in March 2026.

The national inflation rate on a month-on-month basis spiked in September, jumping to a four-month high at 1.1%, up from a deflation of 1.0% in the previous month. Analysts cite three key determinants for the resurgence of pressures on the price of consumer goods and services. These include the persistent upward review in the prices of petroleum products at the pumps, increases in transportation costs, the Cedi’s sustained mild depreciation, and limited supply of some essential staple foods.  Despite the uptick in the inflation readings, the inflation rate appears well-anchored as it remains below the lower band of the central bank’s medium-term inflation target band of 8.0%±2.0%. The inflation rate is expected to continue to see minimal increase for the rest of the year as economic activities pick up steam as the year draws to a close.

The national food inflation basket rose to its highest since December last year, printing at 4.0% in September, up from 3.0% in August, as some items such as Fresh tomatoes, Ginger, Shrimps, among others recorded significantly higher rates. On a month-on-month basis, the food inflation basket recorded a spike, up from a deflation of 2.6% in August to +1.5% in September.

The national non-food inflation basket remained relatively calm, slowing down from 6.8% in August to print at 6.2% in September as eight out of the twelve observed items recorded rates lower than the group’s average. Month-on-month non-food inflation rate rose marginally from 0.5% in August to 0.6% in September as declines in the cost of Educational services pared down price increases in some of the other subgroup items.

Across the regions, the inflation rate hovered between -0.5% in the Western region and 9.8% in the Ashanti region, with three regions recording inflation rates above the national average. Inflation on both local and imported items saw increases, with the rate on local items climbing from 6.1% to 6.4%, whilst that on imported items also surging from 2.2% to 2.4% from August to September, respectively. Inflation on goods and services categories posted diverging movements, as goods inflation rose from 3.8% to 4.2%, whilst that on services slowed from 8.6% to 8.3% from August to September, respectively.

In line with expectations, the September sitting of the central bank’s Monetary Policy Committee (MPC) saw the committee hold the prime rate at the prevailing 14.0% for the third consecutive time over concerns of the emergence of upside risks to the inflation outlook. The MPC noted that the upside risks to the inflation outlook stem from “upward revisions to utility tariffs, rising ex-pump petroleum prices and the linkage to transport fares, strengthening of the US dollar due to the US interest rate hike, as well as possible spillovers from global supply chain constraints.”