The pace of disinflation will quicken in the months ahead as a tighter monetary stance and tax reliefs take effect in April 2025.

According to IC Insights, the latest decline in annual inflation is encouraging.

“We note that the cooling impact of the 100 basis points hike in the policy rate to 28.0% and the intensified liquidity mop-up is yet to be reflected in price dynamics. Additionally, Ghana’s President assented to the Bill to repeal the E-levy Act on 2nd April 2025, partly easing the tax regime with the potential for slower price increases”.

“These complementary fiscal and monetary policy measures boost our optimism for a faster disinflation in the months ahead, especially with the May 2025 inflation print expected on 4th June 2025”, it mentioned.

Additionally, IC Insights observed early indications of favourable weather conditions as the planting season begins, while the approval of the 2025 fiscal measures provides a timely agricultural support, albeit with the benefits expected during the crop harvest in the third quarter of 2025.

For April 2025 inflation, it anticipates a 70 basis points decline in the annual inflation rate to 21.7% as the stable Ghanaian Cedi and tighter policy regime tame the demand pressure. However, supply-side constraints, especially with food items, will likely nudge month-on-month inflation up to 1.2%.

Ghana’s annual headline inflation surprised to the downside in March 2025, posting a third consecutive month of decline with indications of a strengthening pace of disinflation each month.

Headline inflation declined by 70 basis points to 22.4% year-on-year in March 2025.

This pegged annual inflation rate at the lowest level in four months and slightly dampens the renewed post-Monetary Policy Committee concerns about a likely upturn in domestic yields