Ghana: Bank of Ghana Projects Inflation Will Return to Target Range

The Bank of Ghana (BoG) has projected that headline inflation will gradually return to its medium-term target range of 8 ± 2 per cent, provided the economy is not disrupted by significant domestic or external shocks.

The central bank, however, cautioned that ongoing geopolitical tensions in the Middle East continue to pose upside risks to the inflation outlook, reinforcing the need for a cautious and data-driven monetary policy stance.

Inflation Outlook Remains Positive

According to the Bank of Ghana’s May 2026 Monetary Policy Report, headline inflation recorded a slight increase in April 2026, marking the first uptick since the country began experiencing a sustained disinflation trend in December 2024.

The report attributed the increase primarily to higher prices in the non-food component of the Consumer Price Index (CPI).

Despite the recent rise, the central bank expressed confidence that inflation remains on track to return to its target range over the medium term.

“In the outlook, inflation is projected to trend into the medium-term target band of 8 ± 2%,” the report stated.

Food Prices Moderate While Non-Food Costs Rise

The report showed that food inflation eased marginally to 2.2 per cent in April 2026, down from 2.3 per cent in March, supported by improved food supply following a strong harvest season.

In contrast, non-food inflation increased from 3.9 per cent in March to 4.2 per cent in April, largely reflecting higher utility costs and other non-food price pressures.

The Bank noted that these developments contributed to the slight increase in overall headline inflation during the review period.

Core Inflation Continues to Decline

Despite the increase in headline inflation, the BoG said its preferred measures of core inflation, which exclude more volatile components such as food and energy, continued to moderate.

According to the central bank, the continued decline in core inflation suggests that underlying price pressures remain contained and that the recent increase in headline inflation was not broad-based.

The report added that core inflation measures excluding food remained above the headline inflation rate in April 2026, recording 4.2 per cent and 4.7 per cent, respectively.

The Bank of Ghana maintained that while the inflation outlook remains favourable, developments in global commodity markets and geopolitical tensions will continue to be closely monitored to ensure price stability and safeguard the country’s macroeconomic outlook.