The Bank of Ghana (BoG) is optimistic that inflation will gradually move back within its medium-term target range of 8 percent, plus or minus 2 percentage points, provided there are no major economic disruptions.

The central bank, however, cautioned that ongoing geopolitical developments, particularly tensions in the Middle East, continue to pose risks to the inflation outlook and could influence future price stability.

Details contained in the Bank’s May 2026 Monetary Policy Report show that inflation recorded a slight increase in April 2026 after several months of consistent decline. The report noted that this was the first rise in the inflation rate since the downward trend began in December 2024.

According to the BoG, the increase was largely linked to higher prices within the non-food segment of the Consumer Price Index (CPI), while food prices continued to moderate.

Food inflation eased from 2.3 percent in March to 2.2 percent in April, supported by improved agricultural output and favourable harvests. In contrast, non-food inflation rose to 4.2 percent from 3.9 percent over the same period, mainly due to increases in utility-related costs.

Despite the modest rise in headline inflation, the Bank indicated that underlying inflationary pressures remained contained. Measures of core inflation, which remove the impact of volatile items such as energy and utilities, continued to trend downward, suggesting that price increases were not widespread across the economy.

The report further noted that alternative core inflation indicators that exclude food items remained above the headline inflation rate, standing at 4.2 percent and 4.7 percent, respectively, in April 2026.

The Bank maintained that sustaining prudent monetary policy measures would be essential in keeping inflation on a downward path and achieving its medium-term objective.

Ghana’s current inflation rate stands at 3.7 percent (May 2026), up from 3.4 percent in April, and Finance Minister Dr Cassiel Ato Forson says he is hopeful that the rate will not exceed 5 percent by the end of the year.

On his part, the Finance Minister said the main factor that could push inflation higher is the rising tension in the Middle East.

He made the statement on Tuesday, June 3, during an interview with Bloomberg in London, saying, “We don’t see inflation increasing above five percent by December 2026. Inflation may rise further in the coming months from the current 3.4 percent due to developments in the Middle East and rising crude prices.”

According to him, the government has implemented measures to stabilise the economy and, so far, the country has managed those shocks well.

He was, however, worried about rising fuel prices and their impact on the country’s balance of payments, as the country would have to use more foreign exchange from its reserves to support the cedi.

“We are also worried about the impact on fertiliser and how that could also affect farming,” the minister noted.

Dr Cassiel also noted that the earlier growth rate projection of 4.8 percent may be revised upward by the end of the year, considering the economy’s current performance. This estimate was included in the national budget.

“We have seen some interesting developments in the oil and gas sector; that will impact the GDP [Gross Domestic Product] numbers at the end of this year,” he added.

The minister further stated that he would revise the figures when he presents the Mid-Year Budget Review in July 2026.

On the government’s decision to request a Policy Coordination Instrument (PCI) after the completion of the Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF), Dr Forson said the aim is to sustain the recent gains and assure investors of the government’s fiscal discipline going forward.

The minister also anticipated an improved investment grade after the completion of the Policy Coordination Instrument.

“Our investment grade has been improving over the past years, and we should look forward to hitting BBB after this initiative,” the Finance Minister added.

The Finance Minister also disclosed that the government will use the Mid-Year Budget Review to announce its New Economic Policy Programme, aimed at stabilising recent gains while pressing ahead with the needed reforms.