In brief
- Cedi strength anchors annual disinflation amid choppy sequential rate. Ghana’s headline inflation fell sharply by 160bps to 12.1% in July 2025 (IC Insights: 12.7%), its lowest since October 2021, marking the seventh consecutive monthly decline and a cumulative 11.7pp drop year-to-date. The broad-based disinflation, driven by currency strength, lower energy costs, and tight policy settings, reinforces the improving macro backdrop. However, wild month-on-month swings persist, with July posting a 0.7% m/m inflation after June’s deflation, highlighting lingering but softening short-term price pressures and the need for a cautious approach to policy easing.
- Cooling across CPI, despite fuel levy-induced stir. Food and non-food inflation continued to ease in July 2025, reinforcing Ghana’s broad-based disinflation trend. Annual food inflation declined for the sixth straight month to 15.1% (-120bps), its lowest since January 2022, driven by easing post-harvest pressures, with inflation for vegetable and tuber falling into single digits for the first time since 2021. Non-food inflation also dropped to 9.5%, marking its ninth consecutive decline and a return to single digits for the first time since February 2021, led by sharp moderation in housing and utilities. However, the mid-July fuel levy triggered a mild rebound in transport prices on a monthly basis, with limited impact on annual inflation.
- We foresee a risk of upside detour in August on the back of unfavourable base effect. We expect a modest contraction in August 2025 CPI level due to steady influx of harvest supplies, but the base effect from last year’s sharper contraction could push annual inflation up by 30bps to 12.4%. However, we expect softer energy prices and sustained Cedi gains to cushion the upside risk, with a projected month-on-month deflation of 0.5%.
- The end-2025 forecast appears more bullish but we stay cautious ahead of the 4Q2025 utility tariff hike. The stronger-than-expected disinflation in July 2025 has improved our end-year inflation outlook to a midpoint of 10.5% (from 11.3%), with a strong chance of reaching the mid-9.0% area. However, due to uncertainty over potential utility tariff hikes in 4Q2025, we maintain our forecast at 11.3% ± 1.0pp, leaning toward the lower end (10.3%), pending the utility tariff hike.
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