Inflation Cements at Multi-Year Low

Successive consumer price indices continue to record tiny increases, signaling a relatively tame inflation outlook as the headline inflation rate cemented its single-digit trajectory, recording its sixth consecutive single-digit reading. Data released by the Ghana Statistical Service showed that the headline inflation rate registered its fourteenth consecutive drop, inching down from a year high of 23.1% in February 2025 to print at 3.3% in February 2026. This, however, represents a drop of 50 basis points from an inflation rate of 3.8% in January 2026, the slowest decline since August 2025.

Month-on-month inflation reading, however, hinted at the presence of some minimal upward price pressures on consumer goods as the monthly inflation reading for February edged up by 0.8%, an addition to January’s 0.2% uptick. Whilst the headline inflation path showed a sustained shift in prices, signaling a firm path to macroeconomic stability with the prices of most items showing a relative stability of the past year, the monthly inflation readings show on a micro level the pass-through effects of some price adjustments in some key items such as utility tariffs, crude oil prices, and food costs, among others. Although the inflation outlook is expected to remain largely stable over the short-term, there are fears that the ongoing geopolitical unrest in the Middle East could significantly lift crude oil prices and pose some level of risk to Ghana’s inflation outlook.

Inflation on food items continued its downward trajectory, coming in with a rate of 2.4% in February, down from 3.9% in the previous month, with the drop sustained by deflation recorded by some key items such as Cereal products (-7.0%), Tea & other plant products (-3.9%), Vegetables, tubers & plantain (-3.2%), and Cocoa drinks (-2.8%). Month-on-month food inflation showed a massive decline from 1.1% in January to 0.2% in February as eight led by Fruits & nuts (-5.0%) out of the observed fifteen food items recorded price decreases.

After posting significant drops in both the yearly and monthly readings in the last month, the inflation rate on non-food items reversed its course in February as both scales saw increases. The year-on-year inflation reading on non-food items climbed from 3.9% in January to print at 4.0% in February, whereas the month-on-month inflation reading picked up from -0.5% in January to 1.2% in February. The continuous deflation in Transport costs failed to lower the group’s inflation rate as most items in this category, led by Housing & utilities and Education services, underwent significant price increases.

Across the regions, the inflation rate ranged from a deflation of 5.6% in the Savannah region to an inflation of 8.9% in the North East region. Inflation on local goods remained unchanged at 4.5% in February following a sharp increase in the monthly reading from 0.4% to 1.2%, whilst the yearly inflation reading on imported items saw a sharp drop from 2.0% in January to 0.6% in February. Inflation on the goods and services categories recorded decreases, down from 3.6% and 4.0% in January to 3.2% and 3.7%, respectively.

The central bank’s monetary policy committee sits later in the month to review recent macroeconomic trends and accordingly announce the policy rate and other monetary measures. Although it is expected that the committee will wittingly announce a policy rate cut given the current direction of the relevant macroeconomic variables, the committee is likely to exercise restraint on the back of the emerging possible risks to the inflation outlook.