The Ghana Statistical Service (GSS) has disclosed that inflation for July 2025 dropped to 12.1%, down from 13.7% recorded in June this year. This marks the seventh consecutive reduction in the inflation rate this year since October 2021.

The Service attributed the decline to a significant reduction in the general price of foodstuffs and other items. Prices of goods and services in Ghana increased by 0.7% from June 2025 to July 2025.

As of June, the country recorded a 13.7 percent rate, a 4.7 percent decline from the 18.4 percent rate reported in May. Food inflation fell by 6.5 percentage points to 16.3 percent, down from 22.8 percent in May, whereas non-food inflation dropped by 3 percentage points to 11.4 percent. The Upper West Region recorded the highest regional inflation of 32.3%, largely due to food inflation and utilities.

The Bono region recorded the lowest of 8.4%.

On a regional level, the Upper West Region once again recorded the highest inflation at 24.8%, though this was down from 32.3% in June. This figure is more than twice the national average of 12.1%. In contrast, the Central Region posted the lowest rate at 7.7%.

Prior to the release of GSS's recent data, an economic research firm, IC Research, projected that Ghana’s inflation rate will experience a significant decline, dropping to 16% by the end of June.

According to IC Research, the projected improvement is partly driven by the appreciation of the local currency and a reduction in fuel prices, both of which are easing inflationary pressures.

“The June 2025 CP [Consumer Price Index]I data window recorded a 29.5% month-on-month and 35.3% year-on-year appreciation of the Ghanaian cedi against the US dollar. This exerted downward pressure on prices of imported items with notable declines in petroleum prices and transport fares.

The announced 15.0% reduction in commercial transport fares will continue to restrain transport inflation with downside spillovers for other items.”

“Additionally, we estimate that the lower transport cost likely eased the month-on-month pressure observed for vegetables & tubers last month, potentially sustaining food disinflation in June [2025]. Consequently, we forecast a 240 basis points decline in the June 2025 annual inflation to 16.0% with the month-on-month rate at 0.8%", IC Research added.

Ghana ended the year 2024 with 23.8% inflation. In January 2025, inflation slightly declined to 23.5%. And since then it has continued to ease. In February inflation declined to 23.1%; it saw another decrease in March to 22.4% and declined again in April to 21.2%.

Due to the consistent decline in inflation rate and recorded progress with other macroeconomic variables, the Bank of Ghana's (BoG) Monetary Policy Committee has reduced the monetary policy rate from 28 percent to 25 percent.

Governor of the Bank of Ghana, Dr Johnson Asiama noted that the deceleration was underpinned by the tight monetary policy stance, fiscal consolidation, easing food supply constraints, as well as the strong recovery of the cedi. In line with the easing underlying inflation pressures, the Bank’s main core inflation measure, which excludes energy and utility items, has declined markedly.

“Similarly, inflation expectations by banks, consumers, and businesses are broadly anchored,” he added.

He further revealed that "growth in monetary aggregates remained subdued during the first half of the year, primarily due to the tight monetary policy stance, strong liquidity management, and reduced government borrowing."

"In line with the disinflation process and easing inflation expectations, interest rates at the short end of the money market have declined sharply, and in turn, reduced the cost of government borrowing," the BoG Governor added.

According to Dr Asiama, data on budget execution indicated a strong commitment to fiscal consolidation as expenditures adjusted within set targets to accommodate the revenue shortfalls during the first half of 2025.

As a result, the overall fiscal deficit on a commitment basis was 0.7 percent of GDP, outperforming the budget target of 1.8 percent of GDP.

"The external sector has improved markedly, with a record current account surplus of US$3.4 billion in the first half of 2025, supported mainly by higher prices and increased production volumes of gold and cocoa. The current account surplus, together with the outturns in the capital and financial accounts, culminated in an overall balance of payment surplus of US$2.2 billion, significantly higher than the US$588.5 million recorded in June 2024. On this score, Gross International Reserves stood at US$11.1 billion at end-June 2025, equivalent to 4.8 months of import of goods and services, compared to US$8.9 billion (4.0 months of import cover) as at end-December 2024," he added.

Overall, the Committee noted that macroeconomic conditions have significantly improved, "inflation expectations are broadly anchored, external buffers have strengthened, and confidence in the economy is returning."

The cedi has rebounded strongly against the major trading currencies. The cedi has recorded a remarkable turnaround in the first six months of 2025, appreciating by 42.6% against the US dollar. The cedi also appreciated by 30.3% against the British pound and 25.6% against the euro during the same period.

Meanwhile, the Bank of Ghana has projected that inflation is likely to decline further and fall within the medium-term target range of 6 to 10 percent during the third quarter of 2025, ahead of earlier expectations.

“The July forecast also shows that headline inflation is expected to decline further in the third quarter of 2025 and trend within the medium-term target of 8±2 percent by the end of 2025, earlier than initial projections,” the Governor noted.