Ghana’s Inflation Eases to 23.5 Percent in January 2025

KEY POINTS

• Ghana’s inflation dropped to 23.5 percent in January 2025.
• Food inflation rose to 28.3 percent, driven by rising food prices.
• The Bank of Ghana is maintaining a 27 percent interest rate.

Ghana’s inflation rate saw a slight decline in January 2025, easing to 23.5 percent from 23.8 percent in December 2024, according to the Ghana Statistical Service (GSS). Government Statistician Professor Samuel Kobina Annim announced the figures on Monday, February 3, 2025, in Accra, highlighting a marginal slowdown in price increases.

The drop was mainly due to non-food inflation, which fell to 19.2 percent from 20.3 percent in December. However, food inflation continued to rise, reaching 28.3 percent compared to 27.8 percent the previous month.

According to Professor Annim, the steady increase in food prices, particularly vegetables, tubers, and plantains, has significantly contributed to inflation over the last six months.

“In August 2024, food inflation was at 19.1 percent, and now it’s at 28.3 percent—that’s almost a 10-percentage-point jump in just six months,” Annim explained.

Rising food prices and currency fluctuations

Food inflation remains a key concern, with yam prices increasing by 72.9 percent year-on-year, while fresh tomatoes rose by 43.3 percent. The impact of rising food costs is being felt across the country, making essential goods less affordable for many households.

At the same time, inflation for locally produced goods dropped to 25.7 percent in January, down from 26.4 percent in December. On the other hand, imported inflation rose slightly to 18.4 percent, up from 17.9 percent the previous month.

This rise in imported inflation is being attributed to global trade factors and exchange rate fluctuations, which continue to impact prices in Ghana’s multi-currency economy.

The Western Region recorded the highest inflation rate of 49.9 percent, while the Volta Region had the lowest at 18.0 percent.

Economic policy and future inflation trends

This slight decline in inflation is the first drop in five months and comes as Ghana transitions to new economic leadership under President John Mahama. The slowdown also follows Johnson Asiamah’s nomination as the new Governor of the Bank of Ghana, replacing Ernest Addison.

The Bank of Ghana has chosen to keep its main interest rate at 27 percent forecasting that the government plans to use stricter financial measures to reduce inflationary strain.

According to Graphic Online, Professor Annim emphasized the need for policymakers to collaborate with financial institutions to address rising food prices and stabilize inflation.

“The Ghana Statistical Service is actively working with policymakers. The Bank of Ghana relies not just on the headline inflation figure but also on detailed data to guide economic decisions,” Annim stated.

While the slight drop in inflation offers some relief, rising food prices and external economic factors remain major challenges for Ghana’s economy in the months ahead.