Ghana’s inflation outlook continues to brighten, with a new report from IC Research predicting a significant drop in headline inflation to 16.0% in June 2025.

This forecast comes on the heels of sustained macroeconomic improvements, particularly the appreciation of the Ghanaian cedi and a notable drop in energy prices.

“The June 2025 CPI 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.”
IC Research

In addition to the foreign exchange gains, IC Research pointed to the recent 15.0% reduction in commercial transport fares as a major contributor to restraining inflation, particularly in the transport sector. “The announced 15.0% reduction in commercial transport fares will continue to restrain transport inflation with downside spillovers for other items,” the report noted.

Food Prices Ease Amid Planting Season

Food inflation, a significant component of the overall Consumer Price Index (CPI), also showed signs of cooling. IC Research reported that food inflation dropped by 220 basis points to 22.8% in May 2025. This trend was largely attributed to a favourable base effect in prices for vegetables and tubers, which carry a heavy weight in the food basket.

“Inflation for vegetables & tubers nosedived by 10.3 percentage points to 24.0% year-on-year,” the report detailed. However, the month-on-month price for this group increased by 2.4% due to the ongoing planting season, reflecting typical seasonal supply constraints.

Still, analysts believe the downward pressure on food prices will persist. “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,” IC Research noted.

In the non-food category, inflation fell even more dramatically. The report indicated a sharp 350 basis points drop to 14.4% year-on-year in May 2025. This represents the seventh consecutive month of decline, further reinforcing the overall disinflationary trend.

“Notably, we observed declines across 10 out of the 12 divisions of non-food inflation,” IC Research observed. Among these, the transport sector stood out with the most substantial decline. “Transport inflation tumbled by 11.8 percentage points to 3.1% year-on-year as the cedi’s appreciation ignited a reversal in energy prices with a domino effect,” the report added.

Disinflation Momentum Gains Strength in 2025

Headline inflation fell by 280 basis points to 18.4% year-on-year in May 2025, marking the fifth straight monthly drop. This brings the cumulative decline in headline inflation to 540 basis points over the first five months of the year.

This is a sharp contrast to the same period in 2024, when inflation only dropped by 10 basis points. “The faster disinflation reflected a strong base effect, a favourable pass-through of the recent cedi appreciation and lower prices of petroleum products,” the report highlighted.

Looking ahead, IC Research maintains a cautiously optimistic stance, citing continued benefits from currency stability and a supportive energy price environment. “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%,” the firm concluded.

The anticipated sharp drop in inflation to 16% in June 2025 signals growing macroeconomic stability in Ghana. As food and non-food inflation continue to retreat—driven by favourable exchange rate movements, declining energy costs, and targeted government policies—the country may be entering a period of stronger price stability.