Professional services firm, Deloitte, has pointed out that the projected decline in inflation by the end of 2025 can be achieved if the government can follow through with the various measures designed and intended to be deployed to address the high inflation.

In particular, it said, the Agriculture for Transformation Agenda promises to address key inefficiencies along various food value chains, thereby spurring production and taming food inflation, which has been the main driver of the high inflationary pressures.

The government is predicting an end-year inflation of 11.9% relative to 23.8% reported at the end of December 2024.

The measures to achieve this include implementing an Agriculture for Economic Transformation Agenda that aims to increase food production and reduce food inflation; targeting large ticket items in the inflation basket such as transportation and utilities and implementing measures to slow down inflation rate and leveraging appropriate monetary stance to support disinflation process.

Deloitte also advised the government to consider the impact of emerging geo-political risks.

“We further recommend that government considers the impact of emerging geo-political risks in Europe, America and Russia and the potential trade wars that may result from these and, to the extent feasible, put in measures to address any excesses from these geo-political risks that may impact adversely on our pricing developments”.

“Whilst we acknowledge the various policy interventions intended to mitigate our FX risks (i.e. streamlining gold sales through the GoldBod, intensifying forward FX [foreign exchange] auction, reducing public spending and budget deficit, and prioritising import substitution), we have identified the declining cocoa production as a major issue that must be addressed to also help in boosting our forex reserves and reducing the FX demand pressure”, it added.

Headline inflation increased marginally from 23.2% as of the end of 2023 to 23.8% in December 2024. The upward trend in inflation in 2024 was largely driven by a spike in food inflation over the period.