Ghana’s February 2025 Inflation Rate Decreases to 23.1%

The inflation rate in Ghana has dropped to 23.1% in February 2025, down by 0.4 percentage points from January. This decline marks the second consecutive month of disinflation, although inflation remains high, particularly in food-related categories. Specific sector rates indicate significant variances, particularly with local versus imported items.

The inflation rate in Ghana for February 2025 has decreased by 0.4 percentage points, resulting in a figure of 23.1% year-on-year, as reported by the Ghana Statistical Service (GSS). The previous month’s inflation rate for January was recorded at 23.5%. Furthermore, February witnessed a decrease of 0.4 percentage points in both year-on-year and month-on-month inflation rates, marking a second consecutive month of disinflation in 2025, albeit marginally.

Despite the decline in February’s inflation rate, it remains the third highest in the past ten months, matching the rate observed in May 2024. Additionally, the overall month-on-month inflation showcases a third consecutive month of decline, significantly reducing from the 2.6% rate recorded in November 2024.

The GSS report indicates that the following divisions experienced year-on-year inflation rates surpassing the overall inflation rate of 23.1%: Food and non-alcoholic beverages (28.1%), Alcoholic beverages, tobacco and narcotics (25.6%), and Housing, water, electricity, gas, and other fuels (24.3%). Only the food and non-alcoholic beverages sector registered a month-on-month inflation rate of 1.8%, which was higher than the overall 1.3%.

Specifically, vegetables, tubers, and plantains emerged as the primary contributors to both annual food inflation (4.3 percentage points of the total annual food inflation of 28.1%) and monthly food inflation (0.2 percentage points of the overall monthly food inflation of 1.3%). Notably, the annual inflation rate for these items stands at an impressive 45.5%, indicating their significant role in food inflation.

The report further elucidates that there exists a gap of 9.3 percentage points between food inflation (28.1%) and non-food inflation (18.8%). In February 2025, both year-on-year and month-on-month food inflation experienced increases of 0.2 and 0.4 percentage points, respectively, with month-on-month food inflation (1.8%) exceeding non-food inflation (0.9%) by 0.7 percentage points. The inflation for locally produced items also contrasts with that of imported items, presenting a difference of 6.6 percentage points at 25.1% and 18.5%, respectively.

Interestingly, year-on-year food inflation has shown a marginal decrease for the first time in five months, while year-on-year non-food inflation has progressively slowed for the fifth consecutive month, also marginally.

In summary, Ghana’s inflation rate for February 2025 has shown a slight decline, marking two months of consecutive disinflation. Although the inflation remains notably high, it is essential to recognize the specific sectors contributing to these figures, particularly in food inflation. The variations between food and non-food inflation rates, as well as domestic and imported goods, highlight ongoing economic dynamics that require close monitoring by policymakers and economists.

Original Source: www.ghanabusinessnews.com