Ghana’s inflation rate has dropped sharply to 18.4% year-on-year in May 2025, from the 21.2% recorded in April, according to the latest data released by the Ghana Statistical Service (GSS).

The 2.8 percentage point drop marks the most significant single-month decline in recent months and reinforces a steady disinflation trend observed since the beginning of the year.

This marks the fifth consecutive month of decline in inflation in 2025 and reflects the lowest year-on-year inflation rate since February 2022, indicating continued improvement in Ghana’s macroeconomic environment. The sharp drop is seen as a promising sign for households and businesses grappling with high costs over the past two years.

Government Statistician, Dr. Alhassan Iddrisu, attributed the marked slowdown in inflation primarily to reductions in transport fares, stemming from falling fuel prices at the pumps. “The major contributor to the decline in May inflation was the significant reduction in transportation fares, which followed the downward adjustment of fuel prices,” Dr. Iddrisu explained.

He added that non-food inflation—covering categories such as housing, transport, clothing, and utilities—also played a critical role in the overall inflation drop. The easing in non-food prices reflects both improved supply chain conditions and the impact of stabilizing exchange rates.

“This shows that the policy measures aimed at ensuring macroeconomic stability and inflation control are beginning to yield the expected results,” Dr. Iddrisu emphasized during a press briefing in Accra.

Regional Disparities in Inflation

Despite the national trend of declining inflation, regional disparities remain a concern. According to the GSS report, the Upper West Region recorded the highest year-on-year inflation in May at a staggering 38.1%, more than twice the national average. In contrast, the Ahafo Region registered the lowest inflation at 14.5%.

These regional differences underscore the uneven impact of inflationary pressures across the country. Analysts point to variations in transport networks, commodity distribution, and local market conditions as potential drivers of such disparities. The situation highlights the need for targeted interventions at the regional level to address localized inflation dynamics.

The continuous disinflation since January 2025 suggests that government policies, including fiscal consolidation efforts and tighter monetary policies by the Bank of Ghana, are making headway in curbing inflationary pressures. The central bank has maintained a relatively tight monetary stance to anchor inflation expectations and stabilize the Ghana cedi, which had suffered significant depreciation in previous years.

Economists see the May inflation figures as a positive development for economic planning and investment. Lower inflation enhances consumer purchasing power, reduces uncertainty for businesses, and supports economic recovery efforts, particularly in key sectors like manufacturing and retail.

However, economic experts also caution against premature celebration, urging sustained vigilance and policy discipline. “While the disinflation trend is encouraging, it is important that government and monetary authorities remain committed to structural reforms and fiscal prudence,” remarked Kwabena Asare, a senior economist with a local think tank.

Implications for Ghanaians

For many Ghanaians, the decline in inflation is beginning to translate into moderate relief at the market and fuel stations. Lower transport fares reduce the cost of commuting and logistics, which in turn affects the pricing of goods and services. Consumers are cautiously optimistic that continued disinflation will eventually lead to real gains in their standard of living.

Traders and small business operators have also welcomed the decline. “We’ve seen prices of fuel go down, and transport charges have also reduced, which is good for our business,” said a foodstuff trader in Accra. “But we hope this trend will continue, so other prices can come down too.”

While external risks and domestic challenges remain, the current trend provides a foundation for building economic confidence and planning long-term recovery.

Sustaining this momentum will require continuous commitment to prudent fiscal management, effective monetary policy, and inclusive regional economic strategies to ensure that all parts of the country benefit from the improving inflation outlook.