Stable Cedi and Falling Food Prices to Drive Inflation Down to 11.9% in 2025, Deloitte Projects
Ghana’s inflation rate is set to decline further in 2025, with Deloitte projecting an annual average of 11.9%, driven by a more stable currency and easing domestic food prices.
The forecast, published in the firm’s “Sneak Preview of 2025” report, signals a continued recovery from the sharp price pressures of previous years.
The global consultancy firm highlighted the progress made in 2024, where inflation dropped from an average of 40.28% in 2023 to 22.85% for the first 11 months of the year. By November 2024, inflation stood at 23%, though still above the government’s year-end target of 15%.
“Inflation declined in six of the 11 months so far in 2024, thanks partly to the effect of high interest rates,” Deloitte noted. The firm anticipates that Ghana’s disinflationary trend will persist, albeit with risks, as the projected rate remains above the Bank of Ghana’s medium-term target of 8% ± 2%.
Structural Drivers of Disinflation
Deloitte attributes the expected decline in inflation to several key factors, including the stabilisation of the Ghanaian cedi, moderation in domestic food prices and a reduction in supply-side cost pressures.
These improvements are expected to create a more conducive environment for economic growth by lowering borrowing costs and enabling further monetary easing by the central bank.
Risks to Outlook
However, Deloitte flagged potential headwinds to Ghana’s inflation trajectory. “The lingering effects of election-related spending could limit the pace of disinflation,” the report stated. Additionally, the government is expected to introduce new taxes and raise tariffs on utilities such as water and electricity, measures that could add to consumer costs.
Businesses, facing higher operational expenses, are likely to pass on these increases to consumers, further elevating the cost of living.
Despite these risks, Deloitte maintains that the outlook for 2025 remains broadly positive, provided fiscal policy adjustments are managed carefully. A sustained decline in inflation would allow for lower interest rates, encouraging private sector activity and supporting broader economic recovery.
The challenge, according to Deloitte, will be balancing fiscal consolidation with measures to protect the gains made in stabilising inflation.
Informative