Ghana Expected to Achieve Single-Digit Inflation by Late 2025

An insightful report from a prominent professional services firm has shed light on the current economic landscape in Ghana. The firm cites a “sustained disinflationary trend”, suggesting that this trend might offer the Bank of Ghana a vital opportunity to consider easing interest rates. What if the July Monetary Policy Committee (MPC) meeting announces such a move? It could profoundly impact our financial ecosystem.

Deloitte, the firm behind this report, is optimistic about the potential effects of lower interest rates. They affirm that “an ease in interest rates will encourage more lending to the real sector and support further output and overall economic growth.” Imagine small businesses gaining the financial backing they desperately need to thrive—this could be a transformative moment for many entrepreneurs.

However, the report points out that this optimism must be tempered with caution. The ongoing fiscal consolidation measures, in conjunction with strategic monetary policy adjustments, could sustain downward pressure on inflation throughout the second half of 2025. Yet, it begs the question: how will these adjustments impact everyday citizens?

Deloitte raises a red flag regarding potential upside risks. These risks include global economic shocks and domestic tariff modifications, like the recent increase in electricity tariffs by 2.45%. Such adjustments not only have implications for the cost of living but also ripple into production costs—a reality that can affect every consumer, from the coffee shop owner to the baker selling bread on the corner.

Additionally, there’s significant concern surrounding the introduction of GH¢1.00 fuel levy on petroleum products. This creates another layer of uncertainty, with Deloitte labeling it an “upside risk” due to the potential escalation of fuel and transportation costs. Picture this: a family budgeting their monthly groceries suddenly finding they have to allocate more for transportation. This can undoubtedly strain household budgets and evoke a sense of frustration in many.

Improving Real Returns amid Declining Inflation

In what can only be described as a welcome relief, Ghana’s headline inflation for June 2025 fell to 13.7%, a notable decrease from 18.4% in May. What contributed to this positive shift? Several factors were in play, including reduced domestic fuel prices, diminished transport costs, falling food prices, and a stronger Ghanaian cedi against foreign currencies.

Even month-on-month inflation revealed encouraging trends, registering a deflation rate of -1.2%. This marked the first record of deflation since August 2024 and paints a promising picture, doesn’t it? When inflation decreases, both consumers and investors stand to gain.

When we delve deeper into the specifics, the food and non-food inflation indices showed significant deceleration, dropping to 16.3% and 11.4%, respectively, in June.

Deloitte noted that the consistent decline in inflation has substantially improved the real rate of return on investments. With the monetary policy rate as a benchmark, the real return rose impressively to 14.3% in June 2025, surging from a mere 6.2% during the same period in 2024. That’s a considerable increase, and it brings to light the notion that a sound economic environment encourages investment—a critical element for long-term growth.

Deflation in the Transport Sector

Examining different sectors reveals interesting dynamics. Among the 13 inflation divisions monitored, the transport sector stood out as the only category recording a negative inflation rate, which declined sharply to -8.5% in June 2025, down from a staggering 19% in June 2024. This remarkable shift is owed to the significant drop in local fuel prices and transport fares. It raises an intriguing point: how often do we see such drastic changes in a sector within a single year?

Interestingly, within the top contributors to overall inflation, only the Insurance and Financial Services sector saw an uptick compared to the same period last year. On a monthly scale, certain categories—especially Housing, Water, Electricity, Gas, and Other Fuels—recorded inflation hikes. Such increases, reaching 24.9% and 10.4% in June, contrasted sharply with rates of 21.6% and 9.7% in May, likely linked to rising utility expenses.

As we reflect on these numbers, it becomes clear that the economic landscape in Ghana is changing, presenting both challenges and opportunities. As the saying goes, “In the middle of difficulty lies opportunity.” Are we prepared to seize the moment?