Professional services firm, Deloitte is forecasting a further decline in inflation in 2025, due to a more stable cedi and falling domestic food prices.

According to the leading global firm, inflation will average 11.9% next year.

“Ghana’s inflation declined in six of the 11 months so far in 2024, thanks partly to the effect of high interest rates. As of November 2024, the country’s inflation rate was 23%, a far cry from the government’s year-end target of 15%. Ghana’s 11-month of 2024 inflation average is 22.85%, down from 2023’s average of 40.28%”, Deloitte West Africa revealed in its “Sneak Preview of 2025”

It explained that the "declining trend is projected to continue 2025 at an average of 11.9%. This is still above the upper band of the Bank of Ghana’s 8% +/-2% inflation target".

It added that a more stable cedi, easing domestic food prices and waning supply side pressures will contribute to the projected decline in Ghana’s inflation rate.

Implications and Risks

It pointed out that a sustained deceleration in Ghana’s inflation outlook is positive as this will lead to reduced borrowing costs as the Bank of Ghana (BoG) effects more interest rate cuts.

This will spur increased private sector spending and facilitate business expansions as more credit is made available to the real economy.

“The lingering effects of election spending could limit the anticipated pace of disinflation. In addition, the government is likely to implement some new taxes and tariffs, while at the same time increase existing ones, such as water and electricity tariffs”, it mentioned.

If this happens, Deloitte said business owners will pass on these costs to consumers where the final tax burden typically lies, thus increasing cost of living.