Ghana’s inflation hits four-year low despite oil price pressures

Ghana’s inflation rate eased for a 15th consecutive month in March 2026, defying emerging fuel price pressures linked to escalating Middle East tensions and reinforcing the country’s position as one of Africa’s most stable disinflation stories.

Consumer prices fell to 3.2 percent, down slightly from 3.3 percent in February, according to Government Statistician Alhassan Iddrisu, who announced the figures during a virtual briefing in Accra. The latest reading marks the lowest level since the 2021 rebasing of the consumer price index, supported by sustained stability in the cedi.

The extended disinflation trend places the West African nation among a small group of African economies successfully navigating post-inflation adjustment cycles, even as global risks resurface. While oil prices have surged above $100 per barrel amid geopolitical tensions involving Iran, the pass-through to domestic inflation has so far remained contained.

On a month-on-month basis, however, prices edged up by 0.1 percent between February and March, signalling mild underlying pressures in the price environment.

Food inflation continued its downward trajectory, easing to 2.3 percent from 2.4 percent in February, with prices declining by 0.3 percent month-on-month—offering some relief to households. Non-food inflation also moderated slightly to 3.9 percent from 4.0 percent, although prices in this category rose by 0.3 percent on a monthly basis, pointing to emerging cost pressures outside food.

A deeper breakdown of the data highlights diverging trends across key components of the inflation basket.

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Goods inflation slowed sharply to 1.7 percent in March from 3.2 percent in February, with prices falling by 1.0 percent month-on-month. Given that goods account for nearly three-quarters of the CPI basket, this decline was the primary driver of the overall moderation in inflation.

In contrast, services inflation accelerated significantly to 7.2 percent from 3.7 percent, with a 0.4 percent monthly increase, suggesting rising cost pressures in service-related sectors.

Inflation dynamics also diverged between domestic and imported goods. Inflation for locally produced items rose to 4.9 percent from 4.5 percent, indicating increasing domestic cost pressures. Meanwhile, imported inflation fell sharply to -0.6 percent from 0.6 percent, reflecting easing external price pressures and the supportive role of exchange rate stability.

Regional disparities remain pronounced. The North East Region recorded the highest inflation rate, while the Savannah Region posted deflation at -4.6 percent, underscoring uneven price dynamics driven by local supply conditions, transport costs, and market access.

Policy divergence emerges

Ghana’s inflation trajectory stands in contrast to broader continental trends, where rising oil prices have prompted caution among policymakers. Central banks in Angola, Morocco, South Africa, and Ethiopia have paused rate cuts in recent weeks as they assess the inflationary impact of higher energy costs.

Ghana, however, has continued on an easing path.

The Bank of Ghana cut its policy rate by 150 basis points to 14 percent at its second Monetary Policy Committee meeting of the year—its fifth consecutive rate reduction—bringing borrowing costs to their lowest level since October 2021.

The smaller size of the latest cut, compared to earlier reductions of 250 to 350 basis points, signals a more measured approach as the easing cycle matures and external risks intensify.