Inflation Faces Renewed Pressures in August

Ghana’s headline inflation reading failed in its attempt to sustain its disinflationary path in August after inflation ticked lower in July, hinting at a return to the slower growth in the consumer price index that had persisted since last year and ended in the first quarter of 2026. According to the latest inflation release for August, a significant drop in the monthly inflation reading for the month of August did little to push the headline inflation further downwards, as a largely base-drift effect sent the national figure to a 2-month high. August’s inflation reading printed at 5.0%, up from 4.6% in July, as a mainly sticky non-food inflation basket offset price declines from the food basket.

Month-on-month national inflation slowed to its lowest level since August 2025, edging down from 0.1% in July to print at -1.0%, largely supported by the ongoing downward movement in prices of some critical food items. Some food items that recorded significant price declines were Lime, Maize, Cocoyam leaves, among others. A relatively stable exchange rate environment in August also came in to support the slower pace of the general price increases. As the festive season approaches amid concerns of an increase in global inflation following lack of headway in the Middle East crisis, domestic inflation is expected to continue to see minimal upward pressures going into the final quarter of the year.

The yearly food inflation declined for the second consecutive time in August to a 4-month low to 3.0%, down from 3.1% in the previous month. The drop was sustained by deflation in some key items in the food basket, as Cereal products, Fish & other seafoods, and Oils & fats at -10.8%, -5.0%, and -4.5% among five others recorded price decreases. Month-on-month food inflation recorded a drop in prices for twelve of its sub-group items out of the fifteen observed items in the basket. This was led by Fish & other seafoods at -8.0%, Fruits & nuts at -5.5%, and Oils & fats at -3.2%.

The non-food inflation category rose from 6.1% in July to print at 6.8% in August, its highest in ten months. The key contributors to the group’s rate were Housing & utilities, Insurance & financial services, and Education services with rates of 11.6%, 10.6%, and 9.3%, respectively. On a month-on-month basis, price decreases in seven out the twelve sub-group items failed to push the group’s inflation rate down, as the group affirmed its rate at 0.5%, unchanged from the previous month.

Across the regions, the inflation rate ranged from -3.3% in the Bono East region to 11.1% in the Central region, with four regions recording inflation rates above the national average. Inflation on both Local and Imported goods reversed July’s path as they both underwent an increase from 5.9% and 2.0% to print at 6.1% and 2.2% in August, respectively. For the Goods and Services categorization, inflation equally soared, picking up from 3.4% and 8.5% in July, to 3.8% and 8.6% in August, respectively.

The refresh and renewed upward pressures on the consumer price index are expected to keep the central bank’s monetary policy committee glued to its cautious stance, as the committee will be likely to adopt a wait-and-see approach to pick up more clues as to how the domestic economy will be exposed to the pass-through effect of the geopolitical happenings.