In brief
- Price pressures regaining momentum on food price shock. Ghana’s headline inflation edged up by 20bps to 5.2% year-on-year in September 2026, a tad above our 5.1% forecast but still below the lower bound of the Bank of Ghana’s 6.0% – 10.0% target range. A surprise 100bps jump in food inflation to 4.0% outweighed a 60bps easing in non-food inflation to 6.2%, which benefited from a favourable base. We note that the September transport inflation did not capture most of the 8.0% hike in administrative fares, suggesting that the October 2026 CPI will likely exhibit most of the cost feed through with upside risk to inflation in the month ahead.
- Unfavourable base effect will propel inflation to the 6.0% area in October with higher transport cost fanning the flame. We forecast Ghana’s headline inflation to rise by 80bps to 6.0% y/y in October, driven by weaker food supply (than last year) which will introduce unfavourable base drift relative to the October 2025 CPI. We also model transport fare pass-through and higher fuel prices to exert upward price pressures (with crude oil above USD 100 per barrel in our model). However, unchanged utility tariffs should cap the upside risks. Although the ex-ante real policy rate falls to 8.0%, we perceive limited justification for tightening while the shrinking policy space prevents a cut. We thus expect the BOG to retain the policy rate at 14.0% in the November 2026 MPC meeting.
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