The Bank of Ghana has revealed that its staff projections show a high probability of inflation getting to within 12.0% by the end of 2025 and further down to the medium-term target of 8 ± 2%.
According to the May 2025 Monetary Policy Report, the inflation projections are subject to both upside and downside risks.
In the balance, risks to the inflation outlook are tilted to the downside.
On the upside, the residual effect of prior food supply disruptions that affected food prices, broader supply chain challenges, and escalating trade tensions could impact inflation forecasts.
“We expected these upside risks to be outweighed by the stability in the exchange rate and the falling crude oil prices, which is expected to lead to a significant fall in ex-pump prices feeding into lowering transport fares. Currently, GPRTU has announced a 15.0% reduction in transport fares, effective 26 May 2025. This is expected to dampen the pressures on food and non-food inflation”, the report alluded.
“Also, there are expectations of a downward review of utility tariffs and calls on trading associations like GUTA [Ghana Union Traders Association] to begin reducing prices. We also see a gradual re-anchoring of inflation expectations and ongoing absorptive fiscal consolidation efforts which are well aligned with the 2025 budget”, it added.
Inflation for the month of May 2025 dropped sharply to 18.4%, the fifth consecution decline.
This was as a result of a reduction in transport fares and a decline in non-food inflation.
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