Ghana’s recent achievement of single-digit inflation may prove short-lived, as the World Bank projects the country will end 2025 with double-digit inflation rates despite significant gains made this year.
Ghana’s inflation dropped to 9.4% in September, marking the first single-digit reading in four years, bringing relief to businesses and consumers who endured nearly 55% inflation in early 2023. However, the World Bank’s October 2025 Africa Pulse report casts doubt on the sustainability of this achievement.
The report, which tracks economic trends across 47 African economies, lists Ghana among nine countries expected to battle persistent inflationary pressures through year-end. The others include Nigeria, Angola, Ethiopia, Malawi, São Tomé and Príncipe, Sudan, Zambia, and Zimbabwe. This projection contrasts sharply with the optimism expressed by Ghanaian authorities following recent monetary policy successes.
The Bank of Ghana responded to September’s inflation data by cutting its policy rate by 350 basis points to 21.5%, signaling confidence in the disinflation trajectory. Governor Dr. Johnson Asiamah has projected that inflation will remain within the medium-term target band of 8±2% by the end of the fourth quarter.
The International Monetary Fund has also expressed optimism about Ghana’s inflation outlook. According to Ruben Atoyan, the IMF Staff team lead for Ghana’s $3 billion bailout program, inflation is forecasted to remain within the Bank of Ghana’s target band. This projection is anchored on macroeconomic stabilization efforts by the government, with positive momentum expected to continue into 2026 with growth projected at 4.8%.
Yet the World Bank’s assessment points to underlying risks that could derail these gains. Exchange rate volatility, energy cost fluctuations, and food supply challenges represent potential triggers that could reignite inflationary pressures before year-end. External shocks such as global oil price swings and regional trade disruptions compound these domestic vulnerabilities.
Inflation had been declining for seven consecutive months, falling to 12.1% in July from 23.8% in December 2024, demonstrating the effectiveness of tight monetary policy throughout 2024 and early 2025. The disinflation success stemmed from multiple factors working in concert, including monetary policy tightening that squeezed excess liquidity from the economy.
The contradiction between the World Bank’s projection and local forecasts raises questions about the durability of Ghana’s macroeconomic gains. Some traders and analysts have expressed skepticism that the improvements can be sustained, pointing to structural weaknesses in the economy that remain unaddressed.
Ghana’s experience mirrors a broader regional pattern where inflation is cooling rapidly across Africa, yet certain countries continue struggling with persistent price pressures. The World Bank revised Ghana’s 2025 economic growth forecast upward from 3.9% to 4.3%, suggesting overall economic improvement despite inflation concerns.
The challenge for Ghanaian authorities lies in maintaining the delicate balance achieved through fiscal discipline, stable exchange rates, and improved food supply chains. Any slippage in these areas could quickly reverse the hard-won gains of the past year. The current relative calm in market stalls and at fuel pumps may prove temporary if the World Bank’s projection materializes.
Economists warn that maintaining single-digit inflation will require sustained fiscal discipline and continued policy vigilance. The government faces pressure to avoid populist spending that could undermine macroeconomic stability, particularly as political considerations may tempt authorities to loosen fiscal constraints.
The World Bank’s forecast serves as a reminder that Ghana’s battle against inflation remains far from over. While recent achievements deserve recognition, authorities cannot afford complacency. The transition from crisis-level inflation to sustainable price stability requires sustained effort across multiple policy fronts.
Food price dynamics will play a crucial role in determining whether Ghana can maintain single-digit inflation. Agricultural productivity improvements and better supply chain management could help keep food inflation in check. Conversely, weather-related disruptions or logistical challenges could quickly push prices upward.
Exchange rate stability represents another critical factor. The cedi’s performance against major currencies directly affects import costs, particularly for fuel and essential commodities. Any significant depreciation could rapidly transmit into higher domestic prices, potentially fulfilling the World Bank’s double-digit inflation forecast.
The divergence between the World Bank’s projection and local forecasts also highlights the uncertainty inherent in economic forecasting. Multiple factors, both domestic and international, will influence Ghana’s actual inflation outcome by year-end. These include global commodity price movements, domestic harvest outcomes, and government fiscal discipline.
For ordinary Ghanaians, the debate over inflation projections has real consequences. Price stability affects household budgets, business planning, and overall economic confidence. The hope is that current gains can be consolidated and extended, but the World Bank’s warning suggests vigilance remains essential.
As 2025 progresses toward its conclusion, the true test of Ghana’s economic management will become clear. Whether inflation stays within single digits or climbs back above 10% will depend on how effectively authorities navigate the risks identified by the World Bank while maintaining the policy discipline that enabled recent progress.
Source: newsghana.com.gh
