ACCRA, Mar 4 – Ghana recorded a further slowdown in inflation in February, with consumer price growth easing to its lowest level in almost 30 years. The development strengthens expectations that the central bank may continue reducing borrowing costs.
Annual inflation moderated to 3.3 percent from 3.8 percent in January, according to Government Statistician Alhassan Iddrisu. According to data compiled by Bloomberg, the latest figure represents the weakest pace of price growth since 1999.
The disinflation trend reflects multiple supportive factors. Ghana has benefited from elevated gold prices, improved fiscal management and a sustained appreciation of the cedi against major currencies. The stronger exchange rate has helped ease imported cost pressures, particularly for fuel and manufactured goods.
Officials highlighted softer food inflation, easing goods prices and moderation across service categories such as insurance, financial services, healthcare, ICT and transport as key drivers of the slowdown.
The Bank of Ghana has indicated that inflation is likely to remain within its 6 percent to 10 percent target band next year. With price pressures easing faster than anticipated, policymakers may consider another reduction in the policy rate.
However, risks remain tilted to the upside. Escalating geopolitical tensions in the Middle East, involving the United States and Israel against Iran, have pushed global oil prices higher. Brent crude has risen sharply since the onset of the conflict, raising the possibility of renewed imported inflation.
Analysts at REDD Intelligence had projected a sizeable rate cut prior to the data release, though they cautioned that sustained increases in energy costs could complicate the central bank’s decision making.
Earlier this year, the Bank of Ghana lowered its benchmark rate to 15.5 percent from 18 percent, citing faster disinflation, anchored expectations and resilient economic activity. The move extended an easing cycle that has already delivered substantial cumulative cuts since mid year.
On a monthly basis, consumer prices rose 0.8 percent in February, compared with 0.2 percent in January. Food price growth slowed markedly, while non food inflation ticked slightly higher.
The trajectory of global commodity markets and external financial conditions will play a decisive role in determining whether Ghana can sustain its disinflation momentum and continue easing monetary policy in the months ahead.
