Inflation drops to 2-year low - Govt Statistician advises households, entities to limit discretionary spending
The rate at which prices change over time in the country, otherwise known as inflation, has fallen to its lowest level since February 2022, offering hope for households and businesses grappling with the rising cost of living.
The Consumer Price Index (CPI), which measures inflation, recorded 18.4 per cent for May this year, down 2.8 percentage points from 21.2 per cent in April 2025 and 4.7 points lower than the 23.1 per cent recorded in May last year.
The Ghana Statistical Service (GSS), which released the report yesterday, said the drop in the headline year-on-year inflation rate was the fifth consecutive decline, reflecting a sustained slowing down in price and a stabilising economy.
Inflation drops
The food and non-alcoholic beverages inflation rate recorded 22.8 per cent in May 2025 compared to the same period last year, with non-food group recording 14.4 per cent within the same period.
Recreation, sports and culture recorded 22.5 per cent, the highest contribution to inflation, followed by the alcoholic beverages, tobacco and narcotics sub-group which contributed 22.4 per cent and housing water, electricity, gas and other fuels coming third with 21.6 per cent inflation.
The lowest contributors were transport (3.1 per cent); education services (6.3 per cent), information communication (9.7 per cent) and restaurants and accommodation services, 10.4 per cent.
At the regional level, the year-on-year inflation rate ranged from 14.5 per cent, recorded in the Ahafo Region, to 38.1 per cent in the Upper West Region.
The GSS said nine regions recorded an inflation rate above the national average of 18.4 per cent. They are Northern, Oti, Western, Ashanti, Bono, North East, Upper East, Savannah and the Upper West.
Press briefing
The acting Government Statistician, Dr Alhassan Iddrisu, who presented highlights of the CPI at a press briefing in Accra, described the trend as a “clear signal that price stability is returning to our economy.”
He attributed the disinflation to a combination of factors, including a strengthened cedi, tighter monetary policies, fiscal consolidation and positive market sentiments.
“This is an encouraging development for household budgets and economic stability,” Dr Iddrisu noted, adding that the disinflationary trend is expected to continue in the coming months.
Dr Iddrisu recommended that households adopt bulk purchasing, opt for local and in-season produce and limit discretionary spending on high-inflation items to save some income on their purchases.
He also entreated households to leverage the National Health Insurance Scheme benefits to mitigate 20.1 per cent inflation in healthcare costs.
The GSS also encouraged businesses and firms to source locally to capitalise on the faster decline in local goods inflation and avoid sharp price hikes to build customer trust.
“Businesses must also tailor pricing strategies to regional inflation differences, particularly in the north,” the Government Statistician said.
Dr Iddrisu said the persistent regional disparities and the dominance of food inflation underscored the need for targeted interventions to ensure equitable relief across the country.
“These numbers empower us to make smarter decisions for today and tomorrow. By sustaining these efforts, we can create a more stable and prosperous economy for all Ghanaians,” he stated.
Dr Iddrisu, therefore, advised that the government should continue its macroeconomic policies to stabilise the cedi, alongside investments in food storage, transport infrastructure and irrigation, to curb food price volatility.
He added that the government should also expand social protection in high-inflation regions and support small and medium enterprises (SMEs) to strengthen domestic supply chains, which were also critical to tame inflation.