BoG Revises 2025 Inflation Target to 12% Amid Renewed Monetary Tightening
The Bank of Ghana (BoG) has revised its inflation target for end-2025 to 12%, down from the earlier projection of 16%, following fresh monetary and fiscal measures aimed at stabilising the macroeconomic environment.
Governor of the Central Bank, Dr. Johnson Asiama, disclosed the revised target during an interview on the sidelines of the ongoing IMF/World Bank Spring Meetings. He attributed the move to recent policy actions by the Bank and supporting fiscal reforms by government.
“Look at what is happening to the cedi, as well as the policy action taken at the last Monetary Policy Committee meeting—that should help tackle food inflation and deliver lower inflation going forward,” Dr. Asiama remarked.
The Governor further noted that the next meeting of the Monetary Policy Committee (MPC) is scheduled for May 22, 2025, adding that the Central Bank remains committed to evidence-based policy decisions. “I can assure you that the Bank of Ghana will take the required actions based on our data,” he emphasised.
The revision of the inflation target comes on the back of a sustained decline in headline inflation, which dropped for a third consecutive month to 22.4% in March 2025, from 23.1% recorded in February.
Analysts say if the revised target is achieved, it would mark the lowest inflation outturn in four years, further strengthening confidence in the Central Bank’s policy stance.
At its last MPC meeting, the BoG raised the benchmark policy rate by 100 basis points to 28%, as part of efforts to rein in inflationary pressures. Market watchers now anticipate a further rate hike in May, as the Bank intensifies measures to meet the new target.
The International Monetary Fund (IMF), which recently reached a staff-level agreement with Ghana, has backed the BoG’s tightening posture. “The ensuing tightening in the monetary policy stance, together with the ongoing fiscal consolidation, is expected to bring inflation down,” the Fund stated.
In its latest Africa Regional Economic Outlook, the IMF projected Ghana to end 2025 with an inflation rate of 17.5%, considerably higher than the 11.9% forecast by Finance Minister Dr. Ato Forson in the 2025 Budget.
Despite the BoG’s revised target and the IMF’s more cautious outlook, the government maintains its stance on achieving single-digit inflation in the medium term. In the 2025 Budget, Dr. Forson announced a year-end inflation goal of 11.9%, citing it as part of broader efforts to anchor macroeconomic stability.
However, some economists remain sceptical. Professor Peter Quartey, Director of the Institute of Statistical, Social and Economic Research (ISSER), has described the government’s target as overly ambitious given prevailing economic headwinds.
“Achieving that level of inflation may prove difficult considering structural constraints and global uncertainties,” he cautioned.
The coming months will be crucial, as both monetary and fiscal authorities intensify efforts to guide inflation towards the revised target, restore confidence in the economy, and support a sustained recovery.
