The Governor of the Bank of Ghana (BoG) Dr. Ernest Addison has revealed that the central bank is projecting inflation rate to reach single digit by the first quarter of 2026.

He pointed out that the forecast will depend on the economic programmes and policies that will be implemented in 2025 by the incoming John Mahama government.

Dr. Addison disclosed this on PM EXPRESS BUSINESS EDITION with host George Wiafe.

Inflation rate developments in 2024 

The BoG in 2024 was expecting inflation rate to end the year at 15 percent. This was later revised to 18 percent.

Inflation for November 2024 went up marginally to 23 percent from the October figure of 22.1%. 

Dr. Addison explained that inflation is expected to slow down due to the monetary policy measures instituted by the BoG.

“Based on the work that the Bank of Ghana has done in checking rising price levels through the inflation targeting policy, inflation rate will slow down for this year (2025), he assured.

“Inflation rate will hit 15 percent by the end of 2025, from the current 23 percent”, he assured.

According to Dr. Addison, the election sentiments and the uncertainty around the period contributed to the challenges that caused inflation to go up.

He added the negative sentiments around the period also affected the cedi’s performance.

He insisted that the economic situation in the last quarter of 2024 improved, indicating the resilience of the BoG’s policies.

“The Bank of Ghana was expecting that we will see the fast pace of inflation rate slow down as experienced in 2023 to be continued in 2024, but that did not materialize”.

Inflation rate hit 54 .1 percent in December 2022, the highest in 22 years.  The rate started slowing down in 2023.

Cedi’s performance and inflation rate

Dr. Addison is hopeful the cedi will continue to stabilize in 2025, having a good impact on prices of goods.

“It is important we establish that there is a link between the cedi and inflation rate”.

He expressed the view that the challenges faced by the cedi could also be linked to the debt exchange exercise under the International Monetary Fund programme.