Inflation will moderate from an average of 22.9% in 2024 to 18.8% in 2025, Fitch Solutions has indicated.

According to the UK-based firm, the marginal decline will be supported by lower global oil prices that will enable Ghana’s National Petroleum Authority to contain increases in, or even reduce, retail pump prices.

It explained that household consumption will remain the engine of economic growth in the coming quarters as inflationary pressures ease. 

“Household consumption will remain the engine of economic growth in the coming quarters as inflationary pressures ease. We forecast that inflation will moderate from an average of 22.9% in 2024 to 18.8% in 2025, supported by lower global oil prices that will enable Ghana’s National Petroleum Authority to contain increases in, or even reduce, retail pump prices”.

“In addition, our Agribusiness team anticipates that improved supply will drive down the costs of foodstuffs that Ghana relies on - including wheat and rice - further helping to ease inflationary pressures. Moreover, elevated gold prices will bolster the Bank of Ghana (BoG)’s reserves, supporting the cedi and contributing to exchange rate stability, which will limit imported inflation”.

These factors, it mentioned, will ease pressure on household budgets, underpinning our projection that private consumption will grow by 4.0% and contribute 3.2 percentage points to headline economic growth in 2025.

Inflation to Average 15.2% in 2026

Fitch Solutions also projected inflation to ease further, averaging 15.2%, which will support consumer activity.

Meanwhile, Ghana’s Extended Credit Facility arrangement with the International Monetary Fund (IMF) is scheduled to conclude in May 2026, paving the way for a more relaxed fiscal stance.

Fitch Solutions said historically, the end of IMF programmes in Ghana has been associated with marked fiscal loosening, boosting domestic demand.

For example, following the conclusion of the previous IMF programme in 2019, the budget deficit widened to 4.1% of GDP, from 3.4% in 2018.

This contributed to an increase in total domestic demand growth from 5.7% to 7.3% over the same period.