Ghana’s year-on-year inflation rate for July 2025 has dropped to 12.1%, marking the lowest inflation figure recorded since October 2021.

This significant dip from the 13.7% recorded in June 2025 represents the seventh consecutive monthly decline, reinforcing hopes of a sustained recovery from the economic shocks that have plagued the country in recent years.

The Ghana Statistical Service (GSS) released the data on Wednesday, showing broad-based disinflation across key components of the Consumer Price Index (CPI), especially within food and non-food categories. The development has surprised some market watchers, as inflation had hovered persistently above 30% in 2022 and much of 2023 due to global supply shocks, currency depreciation, and fiscal pressures.

Food Prices Lead the Cooldown

The latest data show that food inflation dropped by 1.2 percentage points, settling at 15.1% in July 2025. Month-on-month, prices of food items increased marginally by 0.6%, a slower pace compared to previous months. The easing food inflation comes as a relief to many Ghanaian households, given that food remains a significant driver of household consumption.

According to the Government Statistician, Dr. Alhassan Iddrisu, the moderation in food prices is a major contributor to the overall inflation slowdown. He emphasized that, “the pressures driving inflation over the past months are declining steadily,” and pointed to improved food supply chains, relative currency stability, and proactive monetary policies as contributing factors.

Non-Food and Services Show Continued Declines

The disinflation trend was also evident in non-food inflation, which fell by 1.9 percentage points to 9.5% year-on-year. Similarly, services inflation dropped sharply by 3.1 percentage points to 6.2%, reflecting reduced cost pressures in key sectors such as transportation, health, and education.

However, both non-food and services items still registered modest month-on-month increases of 0.7% and 1.3%, respectively, between June and July 2025. While this indicates that price levels continue to inch upward, the slower pace of increases suggests reduced volatility and improved consumer confidence.

Inflation for goods also declined to 14.2%, a drop of 1.0 percentage point, while services inflation, as mentioned, fell more sharply. The gap between the two continues to narrow, indicating a general price stability in both tangible commodities and intangible offerings.

Price levels for goods rose by 0.5% month-on-month—less than the increase in services—suggesting that businesses are gradually stabilizing pricing structures amidst improved supply conditions.

Locally Produced vs. Imported Goods: Import Prices Ease Further

The GSS also highlighted a notable trend in the inflation breakdown between locally produced and imported goods. While locally produced items recorded a year-on-year inflation rate of 12.9%, imported goods posted a lower rate of 10.0%, continuing a recent pattern where foreign products experience a faster rate of disinflation.

Month-on-month, local items saw a 0.9% increase in prices, compared to a negligible 0.1% increase for imported goods. The significant 2.5 percentage point drop in imported inflation shows improved import conditions, likely due to a more stable cedi and easing global commodity prices.

Regional Divide: Upper West Still Battles High Inflation

While the national picture appears promising, the regional breakdown reveals stark contrasts. The Upper West Region remains the epicenter of inflation woes, posting a staggering 24.8% inflation rate—more than double the national average. Although this is a notable drop from June’s 32.3%, it still underscores the uneven impact of inflation across Ghana’s regions.

At the other end of the spectrum, the Central Region recorded the lowest inflation rate at 7.7%, reflecting strong regional price stability.

The consistent decline in inflation is a welcome sign for the Ghanaian economy, signaling that government and Bank of Ghana efforts to restore macroeconomic stability are gaining traction. However, analysts caution that risks remain, particularly with global uncertainties such as oil prices, geopolitical tensions, and potential currency volatility.