By Issah Olegor
The Bank of Ghana (BoG) has expressed confidence that inflation will remain within its medium-term target range of 8 ± 2 percent, provided there are no major domestic or external shocks, even as policymakers remain cautious about growing geopolitical risks and rising global commodity prices.
The assurance comes as the Monetary Policy Committee (MPC) prepares to conclude its 131st policy meeting, where members are assessing recent inflation developments and determining the appropriate monetary policy stance for the months ahead.
According to the Bank of Ghana’s May 2026 Monetary Policy Report, headline inflation recorded a marginal increase in April 2026, marking the first upward movement since the prolonged disinflation process began in December 2024.
The central bank, however, maintained that the increase was modest and does not undermine the country’s overall inflation outlook.
“In the outlook, inflation is projected to trend into the medium-term target band of 8 ± 2%,” the report stated, while cautioning that escalating geopolitical tensions in the Middle East continue to pose significant upside risks that could disrupt global commodity markets and influence domestic prices.
The Bank explained that these external uncertainties reinforce the need to maintain an appropriate monetary policy stance to preserve Ghana’s recent gains in macroeconomic stability and price moderation.
Data contained in the report show that food inflation continued its downward trend, easing slightly to 2.2 percent in April 2026 from 2.3 percent in March. The improvement was largely attributed to a bumper harvest that boosted food supply and helped contain prices across key agricultural commodities.
In contrast, non-food inflation edged higher from 3.9 percent in March to 4.2 percent in April, driven primarily by increases in utility charges and other service-related costs.
Despite the rise in non-food inflation, the Bank stressed that underlying price pressures remain subdued. Its preferred measures of core inflation—which exclude volatile components such as energy and utility prices—continued to decline, indicating that inflationary pressures have not become widespread across the economy.
The report noted that the Bank’s core inflation indicators, specifically Core 2 and Core 4, stood at 4.2 percent and 4.7 percent respectively in April 2026, remaining above headline inflation but continuing on a gradual downward path that reflects improving underlying price stability.
The latest assessment comes at a time when the Bank of Ghana has acknowledged that the country’s extended period of disinflation has ended.
Speaking at the opening of the 131st Monetary Policy Committee meeting in Accra, Governor Dr. Johnson Pandit Asiama disclosed that headline inflation has risen for three consecutive months—from 3.2 percent in March to 5.3 percent in June 2026—largely due to increases in transport and haulage costs.
According to the Governor, the committee’s primary responsibility is to determine whether the recent increase represents a normal return toward the Bank’s inflation target or the beginning of a more persistent inflationary trend that could require a policy response.
The current inflation outlook reflects the remarkable macroeconomic recovery over the past eighteen months. Since the disinflation process commenced in December 2024, tight monetary policy, fiscal consolidation, exchange rate stability and improved external sector performance have combined to reduce inflation sharply from double-digit levels to historically low rates, creating room for gradual reductions in interest rates to support economic activity.
However, the BoG has repeatedly warned that global developments remain a key source of uncertainty. Escalating geopolitical tensions, particularly in the Middle East, could trigger increases in crude oil prices, shipping costs and imported inflation, with potential spillover effects on domestic fuel prices, transport fares and utility costs.
