Bank of Ghana Governor, Dr Johnson Asiama.
The World Bank has described Ghana’s sharp decline in inflation in 2025 as one of the most dramatic disinflation episodes in the country’s recorded economic history.
In its 10th Ghana Economic Update, Reset for Growth: Sustaining Macroeconomic Recovery and Unlocking Transport for Transformation, published in August 2026, the World Bank said headline inflation fell from 23.2% in February 2025 to 5.4% by December 2025.
Inflation subsequently declined further to 3.2% in March 2026.
“Ghana’s disinflation in 2025 was among the most dramatic in its recorded economic history,” the World Bank said.
The assessment attributed the significant reduction in inflation primarily to tight monetary policy, a strong appreciation of the cedi and easing food prices.
Monetary policy played a key role
The World Bank’s assessment highlights the role of monetary policy in the restoration of price stability, particularly the Bank of Ghana’s decision to maintain a tight policy stance as inflationary pressures remained elevated.
Under Governor Dr Johnson Pandit Asiama, the Bank of Ghana maintained price stability as the central objective of monetary policy while balancing efforts to reduce inflation with the need to support economic recovery.
Inflation fell by 17.8 percentage points between February and December 2025, bringing Ghana firmly back into single-digit territory.
The decline occurred alongside a recovery in economic activity. The World Bank said real GDP expanded by 6.0% in 2025, the fastest annual growth since 2019, while non-oil GDP grew by 7.6%.
The combination of falling inflation and relatively strong economic growth marks a significant improvement in Ghana’s macroeconomic conditions.
From monetary tightening to easing
The sharp decline in inflation and improved inflation expectations subsequently created room for the Bank of Ghana to ease monetary policy.
According to the World Bank, the Monetary Policy Rate was reduced from 28% in April 2025 to 14% by March 2026, representing a cumulative reduction of 1,400 basis points.
“With inflation expectations anchored, the BoG embarked on a sustained monetary easing cycle,” the World Bank said.
The shift marked a transition from aggressive monetary tightening aimed at containing inflation to a more accommodative policy stance as price pressures eased.
Lending rates also decline
The impact of the changing monetary policy environment is also being reflected in borrowing costs.
The World Bank reported that average bank lending rates fell from about 27.0% in June 2025 to 15.6% in June 2026.
Over the same period, the Ghana Reference Rate declined from approximately 23.8% to around 10.0%.
The developments suggest that the gains from lower inflation and monetary easing are increasingly extending beyond headline economic indicators to the cost of credit for businesses and households.
The World Bank’s assessment nevertheless underscores the importance of sustaining the gains made in price stability as Ghana seeks to consolidate its broader macroeconomic recovery.
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