October’s Inflation offers Hope of a Tamed Inflation Outlook

Inflation began the last quarter of the year, firming its position in the single-digit brackets after the rate of inflation slumped below 10% in September for the first time since August 2021. Inflation now remains well-anchored within the Bank of Ghana’s medium-term inflation target band of 10.0%±2.0%, whilst remaining on course to beat the government’s 2025 end-period inflation target of 11.9%. The latest consumer price statistics released by Ghana’s statistical office put the inflation rate at 8.0% in October, the lowest in more than four years, down from 9.4% in the previous month. The month-on-month inflation reading similarly registered a decline, recording a deflation of 0.4% in October from an inflationary figure of 0.9% in September.

Ghana’s inflation statistics have declined significantly, from a recent record high of 54.1% in December 2022, after the economy experienced a post-COVID-linked shock and the nation’s public debt reached unsustainable levels. Inflation began to take a downturn after Ghana signed up for an IMF-supported programme, and as confidence began to creep in. The recent sharp and sustained drop, which has mostly been observed in 2025, has widely come on the back of significant gains in the local currency, a reduction in the prices of petroleum products amid fiscal discipline, and renewed confidence in the economy.

Food inflation fell below 10.0% in October to print at 9.5%, down from 11.0% at the close of the third quarter. Month-on-month food inflation recorded a deflation of 1.0%, down from an inflation figure of 0.6% in September, as some food items such as fish & other seafoods, cereal products, milk & dairy products, fruits & vegetable juices, tea & other plant products, and vegetables, tubers & plantains recorded reductions in their prices.

The non-food inflation basket recorded its steepest dip in three months in October, edging down to 6.9% from 8.2% in the previous month, with transport maintaining its deflationary course for the fifth consecutive time. Month-on-month non-food inflation slowed down from 1.1% in September to print at 0.04% in October. This movement was supported by alcoholic beverages, housing & utility, and transport, among others, which recorded reductions in their monthly inflation readings.

Across the regions, the inflation rate ranged from 1.1% in the Bono East region to 17.3% in the North East region. Inflation on local items in October registered a significant drop from 10.1% in September to 8.0% in October, whilst that on imported items suffered its first jump in seven months, inching up from 7.4% to 7.8% over the same period.

The last sitting of the central bank’s Monetary Policy Committee (MPC) for the year is expected to see the committee leaning towards handing down its third successive policy rate cut as inflation seems tamed. The MPC is, however, expected to act cautiously as economic activities are projected to see a rise during the festive season, which is likely to mount upside pressures on the consumer price index.