Inflation Ends 2026 First Quarter at 3.2%

March’s inflation statistics defied the odds of growing expectations of the first uptick in the headline inflation rate in fifteen months, as the consumer price inflation saw a decline once again, albeit the slowest dip since the disinflationary process began in January 2025. The headline inflation rate declined marginally from 3.3% in February to close the first quarter of the year at 3.2%, the lowest mark since 2021’s price rebasing. The drop represents a 60 basis points (bps) drop from a 3.8% inflation rate recorded at the start of 2026 and a further drop by over 20 percentage points from a 23.5% inflation rate recorded at the start of 2025.

Month-on-month inflation rate eased in March to print at 0.1%, down from 0.8% in the previous month, as most of the observed items remained unresponsive to the rising geopolitical tensions in the Middle East, despite Transport inflation in March alone seeing an increase of 0.3%, having previously recorded a series of deflations. The gradual slowdown in the disinflation process, however, signals that the inflation rate may be reaching its trough. Following the hikes in the prices of petroleum products as the Middle East crisis rages on, and with the Cedi currently undergoing some minimal depreciation pressures, it is expected that the inflation outlook will begin to undergo some upward trend in the near to medium-term.

 Inflation on food items saw a marginal decrease from 2.4% in February to print at 2.3% in March on a yearly basis. The marginal drop came on the back of higher inflation numbers recorded by most food items, as nearly ten of the top-ten inflation items belonged to the food category, with ginger leading with 61.0%. Month-on-month food inflation, on the other hand, recorded a deflation as prices generally declined by 0.3% in March, down from an inflation rate of 0.2% in February. The biggest price drivers contributing to the deflation were Oils & fats, Fruits & nuts, and Cereal products with inflation rates of -2.0%, -1.6%, and -1.2%, respectively, on a monthly basis.

The non-food inflation basket similarly recorded a marginal decline from 4.0% in February to 3.9% in March on a year-on-year basis, with Transport persisting as the only item with a decrease in price, whilst the majority of the items in this basket recorded minimal price increases. Non-food inflation on a month-on-month basis saw a huge decline from 1.2% in February to print at 0.3% in March, buoyed by much slower price increases in March.

Across the regions, the inflation rate hovered between -4.6% in the Savannah region and 8.6% in the North East region, whilst eight regions recorded inflation rates above the national average. Inflation on local and imported items saw diverging results as inflation on local goods rose 4.5% in February to 4.9% in March, whilst that on imported items saw a general decline in prices with a deflation of 0.6% in March, having slowed down from an inflation rate of 0.6% in February. For the goods and services categorization, inflation on Goods dipped from 3.2% in February to 1.7% in March, whilst that on Services rose strongly from 3.7% to 7.2% over the same period.

The March sitting of the central bank’s monetary policy committee saw the committee adopt a more cautious stance as it handed down a relatively modest policy rate cut, slashing the rate by 150 bps to 14.0%. The committee was guided by the presence of upside risks to the inflation outlook, which included the likely pass-through of higher crude oil prices and escalating geopolitical tensions.