Inflation is expected to witness another sharp decline in June 2025 to 16%, IC Research has revealed.
This will be on the back of favourable foreign exchange pass-through and lower energy prices.
“The June 2025 CP [Consumer Price Index]I data window recorded a 29.5% month-on-month and 35.3% year-on-year appreciation of the Ghanaian cedi against the US dollar. This exerted downward pressure on prices of imported items with notable declines in petroleum prices and transport fares. The announced 15.0% reduction in commercial transport fares will continue to restrain transport inflation with downside spillovers for other items”.
“Additionally, we estimate that the lower transport cost likely eased the month-on-month pressure observed for vegetables & tubers last month, potentially sustaining food disinflation in June [2025]. Consequently, we forecast a 240 basis points decline in the June 2025 annual inflation to 16.0% with the month-on-month rate at 0.8%”, it mentioned.
Headline inflation decelerated by 280 basis points to 18.4% year-on-year.
This marked the 5th consecutive decline in inflation and brings the cumulative drop in the annual headline rate to 540 basis points in five months of 2025 compared to the cumulative dip of 10 basis points in the same period of 2024.
The faster disinflation reflected a strong base effect, a favourable pass-through of the recent cedi appreciation and lower prices of petroleum products.
Food Inflation
Food inflation intensified its decline, slowing by 220 basis points to 22.8% in May 2025 on the back of a favourable base effect in the heavily-weighted CPI for vegetables & tubers which offset the uptick for fish & other seafoods.
Inflation for vegetables & tubers nosedived by 10.3 percentage points to 24.0% year-on-year, although the month-on-month rate surged to 2.4% due to the ongoing planting season.
Non-food Inflation
Non-food inflation plunged by 350bps to 14.4% year-on-year, sustaining its declining trend for the 7th successive month and anchoring the disinflation trend.
“Notably, we observed declines across 10 out of the 12 divisions of non-food inflation with the weightier Transport inflation tumbling by 11.8 percentage points to 3.1% y/y as the cedi’s appreciation ignited a reversal in energy prices with a domino effect”, IC Securities concluded.
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