This significant decline, driven by falling costs for both food and non-food items alongside a strengthening cedi, marks the most substantial monthly decrease in months. The development signals improving macroeconomic stability under President John Mahama’s NDC administration, elected in late 2024.

Economist and political risk analyst Dr. Theo Acheampong asserts this sharp drop creates a critical opportunity for the Bank of Ghana’s Monetary Policy Committee (MPC). He argues the central bank should immediately reduce the key policy rate, currently at 28%, by at least 100 basis points. Dr. Acheampong stated that the improved inflation outlook provides “ample space” for decisive monetary easing to support economic activity.

Such a rate cut, according to Dr. Acheampong, would directly ease borrowing costs for businesses and households. He projects this could lead to lower commercial bank lending rates in the coming months, offering tangible relief to citizens facing prolonged economic pressure. Further monetary easing later in the year remains possible if inflation expectations continue to moderate, he suggested.

The substantial decrease in inflation is broadly viewed by analysts as bolstering confidence in Ghana’s economic trajectory. It is anticipated to contribute to lower yields on government Treasury instruments and sustain positive investor sentiment. The Bank of Ghana now faces the challenge of balancing its inflation-targeting mandate with the need to stimulate growth as the Mahama government approaches the midpoint of its term ahead of the 2028 elections.