Ghana’s inflation rate has slowed for the first time in five months, with the Ghana Statistical Service (GSS) announcing a January 2025 inflation figure of 23.5%, down from 23.8% in December 2024. This 0.3 percentage point decline signals a momentary ease in price pressures.
The latest inflation data reveals that between January 2024 and January 2025, the general price level of goods and services increased by 23.5%. However, on a month-on-month basis, inflation rose by 1.7%, indicating a slight moderation from 1.8% in December 2024 and 2.6% in November 2024. This marked the second consecutive month of a slowdown in month-on-month inflation, suggesting a continued but slowing pace of price increases.
Despite the disinflation recorded, January’s inflation rate remains the second highest in the past nine months, reflecting persistent cost pressures in key sectors. Food inflation, which has been a major driver of overall inflation, rose from 27.8% in December to 28.3% in January, marking a 0.5 percentage point increase. Meanwhile, non-food inflation declined from 20.3% to 19.2%, contributing to the overall disinflationary trend.
The data further shows a 9.1 percentage point gap between food and non-food inflation, highlighting the disproportionate impact of rising food prices on household expenses. On a month-on-month basis, food inflation stood at 2.0%, compared to 1.4% for non-food items, reinforcing the continued dominance of food costs in Ghana’s inflation dynamics.
The rise in food inflation according to the Statistical Service was driven largely by prices of vegetables, tubers and plantains.
Inflation for locally produced items remained higher than for imported goods, with local products recording an inflation rate of 25.7%, compared to 18.4% for imported items. This suggests that domestic supply-side factors—such as production costs and agricultural output—are playing a significant role in inflation trends.
The decline in the overall inflation rate comes at a time when Treasury Bill interest rates also recorded their first drop in three months, following the government’s decision to reject nearly GHC 1.4 billion worth of expensive bids in the latest auction.
Although marginal, watchers in the financial sector will closely monitor whether this disinflation continues in the coming months. A repeat in the slowdown recorded for the January 2025 inflation figure could influence monetary policy decisions from the Bank of Ghana.
Source: ceditalk.com