IC Research Sees Possibility of Single-Digit Inflation by End-2025 Despite Tariff and Fuel Levy Risks
IC Research has revised downwards its end-2025 inflation forecast for Ghana to between 10.3% and 12.3%, with a midpoint projection of 11.3%, from an earlier estimate of 11.8% to 13.8%.
The adjustment reflects the stronger-than-expected pace of disinflation, supported by a stronger cedi and a sharp slowdown in food inflation.
“We expect the upcoming crop harvest in the third quarter of 2025 and a favourable base effect in the final quarter of the year to sustain the disinflation momentum in the second half of 2025, with a slight possibility of inflation dipping into the single digits around 9.0% by year-end,” IC Research stated in its latest macroeconomic update.
However, the firm cautioned that the anticipated major hike in electricity tariffs in the fourth quarter and the introduction of the suspended GH¢1.0 per litre fuel levy on July 16, 2025, could slow the pace of disinflation.
For July 2025, IC Research projects a further 100 basis points decline in annual inflation to 12.7%, though it identified the 2.45% hike in electricity tariffs and the closed fishing season for industrial trawlers as potential upside risks to inflation.
The revised forecast follows the release of Ghana’s June 2025 inflation data, which showed a sharper-than-expected decline. Annual inflation fell by 470 basis points to 13.7% year-on-year, marking the lowest inflation rate since December 2021. The drop exceeded IC Research’s expectations, largely due to the stronger cedi and a significant slowdown in food price growth.
Month-on-month inflation surprisingly contracted by 1.2%, compared to the projected increase of 0.8%, signalling a benign inflationary environment. Food inflation slowed markedly to 16.3% year-on-year, with 14 out of 15 sub-categories recording sharp disinflation.
Non-food inflation also eased for the eighth consecutive month, falling to 11.4% year-on-year—the lowest level since November 2021. While housing and utilities inflation rose to 24.9%, this was offset by disinflation across 10 of the 12 non-food divisions.
Notably, transport prices saw significant deflation of 8.5% year-on-year, driven by lower petrol and diesel prices, which declined by 15.2% and 12.7% respectively. The appreciation of the cedi contributed to reducing the cost of imported energy products, further easing inflationary pressures.
The sustained disinflation strengthens market expectations for a dovish decision at the Bank of Ghana’s upcoming July 2025 Monetary Policy Committee (MPC) meeting.
