In brief
- A surprise disinflation in food prices caps the rise in headline inflation below our expectation. Ghana’s headline inflation increased by 30bps to 5.5% in October 2026, below our 6.0% forecast (and 5.8% consensus), as stronger crop harvest numbed food prices to offset higher transport costs and services-led spike in non-food inflation. Monthly prices declined 0.1%, signalling limited underlying price momentum. The real policy rate eased to 8.5% but remains sufficiently restrictive to anchor inflation expectations. We therefore perceive limited justification for an immediate policy response, with the projected year-end outturn reinforcing our view that the recent inflation rebound remains contained rather than broad-based.
- We expect another inflation climb in November before a favourable base effect exerts a drag towards the low-5.0% in December. We forecast Ghana’s annual headline inflation to rise by 30bps to 5.8% in November as the delayed impact of an 18.5% LPG price hike and recent Cedi weakness feed into the November CPI while the harvest-driven food disinflation fades. However, favourable base effects should pull inflation down to 5.3% in December 2026, closing the year below the end-2025 level of 5.4%. At the nominal policy rate of 14.0%, our forecast inflation would restore the real policy rate to 8.7%, reinforcing monetary restraint. We therefore expect the BOG to keep the policy rate unchanged at 14,0% in the November MPC meeting, allowing time to assess the fiscal risk signals in the imminent 2027 budget.
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