Because of a more stable cedi and declining domestic food prices, professional services firm Deloitte predicts that inflation will continue to reduce in 2025.
The top international company predicts that inflation will average 11.9% in the upcoming year.
Six of the 11 months in 2024 have seen a decrease in Ghana’s inflation, in part because of the impact of high interest rates. The nation’s inflation rate was 23% as of November 2024, much below the government’s 15% year-end goal. According to Deloitte West Africa’s “Sneak Preview of 2025,” Ghana’s inflation average for the first eleven months of 2024 is 22.85%, lower than the average of 40.28% for 2023.
The “declining trend is predicted to continue in 2025 at an average of 11.9%,” it explained. This remains above the Bank of Ghana’s inflation target upper band of 8% +/- 2%.
A more stable cedi, lower domestic food costs, and fewer supply-side constraints will all help Ghana’s inflation rate drop, it continued.
Consequences and Risks
As the Bank of Ghana (BoG) implements additional interest rate decreases, it will result in lower borrowing costs, therefore a sustained slowdown in Ghana’s inflation outlook is advantageous.
As more credit becomes available to the actual economy, this will encourage more spending by the private sector and make it easier for businesses to expand.
Election spending’s aftereffects may slow down the expected rate of deflation. Additionally, it stated that the government is expected to raise current taxes and tariffs, like those for energy and water, while also enacting some new ones.
According to Deloitte, if this occurs, business owners would raise the cost of living by passing these expenses on to customers, who bear the final tax burden.
More Stories
The World Bank promises to use its “Better Bank” vision to propel Ghana’s development.
In terms of concessional lending, Ghana is the second-most indebted African nation to the IMF.
Shippers were cautioned not to pay for port delays.