BY ISSAH OLEGOR
The Bank of Ghana (BoG) has declared that the prolonged period of falling inflation has officially come to an end, with policymakers now closely monitoring whether the recent increase in prices represents a temporary adjustment or the beginning of a more persistent inflationary cycle.
Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, disclosed while opening the 131st meeting of the Monetary Policy Committee (MPC) in Accra, where members began deliberations on the country’s macroeconomic outlook ahead of their latest decision on the benchmark Monetary Policy Rate.
According to Dr. Asiama, headline inflation has risen consistently for three consecutive months, climbing from 3.2 percent in March 2026 to 5.3 percent in June 2026 after several months of sustained disinflation that saw inflation fall to its lowest level since Ghana adopted its inflation-targeting framework.
“Headline inflation has risen for three consecutive months from 3.2 percent in March to 5.3 percent in June, driven largely by transport and haulage prices,” the Governor stated.
He explained that although inflation has begun to trend upwards, the current rate remains comfortably below the Bank of Ghana’s medium-term target ceiling of 10 percent under its inflation target band of 8 percent, plus or minus two percentage points. It also remains significantly lower than the 13.7 percent inflation rate recorded during the corresponding period in 2025.
Dr. Asiama noted that the central focus of the Monetary Policy Committee’s deliberations this week will not simply be the recent increase in inflation, but whether the development reflects a normal return towards the Bank’s inflation target or signals a more sustained shift that could threaten Ghana’s hard-won macroeconomic stability.
“The prolonged disinflation phase has ended indeed, and inflation is now returning towards the target band. Whether that return reflects orderly normalisation or the beginning of a more persistent change in the outlook is a central question for our meeting this week,” he said.
The Governor explained that policymakers would carefully assess whether rising prices are beginning to influence inflation expectations among businesses, consumers and investors, warning that changes in expectations often become the driving force behind future price increases.
“The central judgement in this is not whether inflation has moved but whether it is beginning to influence the expectations that shape price behaviour,” he added.
Beyond domestic price developments, the Monetary Policy Committee is also expected to evaluate emerging external and domestic risks that could place additional pressure on inflation in the coming months.
Dr. Asiama identified rising global commodity prices, potential increases in utility tariffs and expected adjustments in transport fares as key factors that could influence the inflation outlook and shape future monetary policy decisions.
The Governor’s remarks come after months of remarkable macroeconomic improvements that saw Ghana experience one of its strongest periods of economic stabilisation in recent history.
During 2025, inflation declined sharply from 23.8 percent at the end of 2024 to 5.4 percent by December 2025, before falling further to 3.2 percent in March 2026. The disinflation was supported by tight monetary policy, fiscal consolidation, exchange rate appreciation and improved external sector performance.
The favourable macroeconomic conditions enabled the Bank of Ghana to embark on a gradual monetary policy easing cycle. Since January 2026, the Monetary Policy Committee has progressively reduced the Monetary Policy Rate as inflation moderated, borrowing costs declined and private sector credit began recovering after several years of tight financial conditions.
However, the recent rebound in inflation presents policymakers with fresh challenges as they seek to strike a balance between supporting economic growth and preventing renewed inflationary pressures from becoming entrenched.
