Bank of Ghana Pushes Single-Digit Inflation Target to Q2 2026
The Bank of Ghana (BoG) has revised its forecast for headline inflation to return to single digits by the second quarter of 2026, deferring its earlier projection of achieving this target by the second quarter of 2025.
This adjustment, announced by Dr. Ernest Addison, Chairman of the Monetary Policy Committee (MPC) and Governor of the BoG, comes amidst persistent food price pressures that have interrupted the disinflation trends observed throughout most of 2024.
The initial forecast was based on a steady decline in inflation since January 2023, following a peak of 54% in December 2022. However, recent pressures on food prices have led to a reassessment of the disinflation trajectory, prompting the revised timeline for achieving single-digit inflation.
At its 122nd press briefing on Monday, January 27, the MPC decided to maintain the prime rate at 27% for the second consecutive time. This decision follows a reduction from 29% in September 2024 and a pause in November 2024.
Dr. Addison explained that the move aims to anchor inflation expectations and stabilize inflationary pressures in the economy.
“The inflation profile remains elevated, largely driven by food price movements, especially in the last quarter of the year. The climate-related factors including the dry spell in some parts of the food-growing regions of the country and the late onset of rains, negatively affected production, while supply chain weaknesses generally affected food prices.
“While the inflation outturn for the year 2024 deviated from the target, it is expected that the disinflation process will resume, contingent on renewed efforts at fiscal consolidation, which is anticipated in the new administration’s economic policy agenda and the yet-to-be-presented 2025 budget statement. The Bank’s latest inflation forecast shows a steady decline and returns to the path of disinflation, with an extended time horizon of achieving the medium-term target of 8±2 percent.
“Under the circumstances, the Committee decided to keep the monetary policy rate unchanged at 27 percent,” announced the Governor of the Bank, Dr Ernest Addison.
