Inflation rate is projected to fall sharply to 16% in June 2025, according to new estimates from IC Research, marking a significant improvement driven by a strong cedi and falling fuel prices.
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The report credits the decline to favorable exchange rate dynamics and a reduction in energy costs, particularly in transportation.
“The June 2025 Consumer Price Index window recorded a 29.5% month-on-month and 35.3% year-on-year appreciation of the Ghanaian cedi against the US dollar,” IC Research stated. “This pressured the prices of imported goods, especially fuel, leading to reduced transport fares.”
A 15% drop in commercial transport fares is also expected to keep inflation in check, with positive spillover effects across sectors.
Food and Transport Disinflation Driving Decline
The report highlights that lower transport costs likely eased month-on-month inflation for key food items, especially vegetables and tubers. This, in turn, is expected to reinforce the food disinflation trend recorded in recent months.
“We forecast a 240-basis point drop in annual inflation to 16.0% in June, with the monthly inflation rate standing at 0.8%,” the researchers projected.
Key Trends from May 2025
Headline inflation dropped to 18.4% in May, marking five straight months of decline. The cumulative reduction in headline inflation for 2025 stands at 540 basis points, compared to just 10 basis points over the same period in 2024. The downward trend is attributed to base effects, currency appreciation, and lower fuel costs.
Food Inflation
Food inflation continued its decline, dropping by 220 basis points to 22.8% in May. A significant dip in the cost of vegetables and tubers offset rising prices for fish and seafood. However, month-on-month vegetable prices increased by 2.4% due to seasonal factors.
Non-Food Inflation
Non-food inflation fell by 350 basis points to 14.4%, continuing its downward momentum for a seventh straight month. Transport inflation saw the most significant decline, dropping by 11.8 percentage points to 3.1%, as the stronger cedi reduced energy costs.
“We saw declines in 10 out of 12 non-food divisions, showing a broad-based disinflationary trend,” the report concluded.
