Inflation in 2025 was driven largely by domestic price pressures, with locally produced items contributing 73.6 percent of total inflation compared with 26.4 percent from imported items, according to the Ghana Statistical Service’s (GSS) maiden annual inflation report.

The report shows that local items, which constitute 68.5 percent of the national consumption basket, recorded an average annual inflation rate of 15.6 percent, reinforcing their dominant role in shaping price movements during the year. Imported items, by comparison, recorded an average inflation rate of 12.1 percent.

“This means nearly three-quarters of inflation came from locally driven price pressures,” the report stated, adding that inflation in Ghana in 2025 was “primarily home-grown, driven by domestic supply conditions, especially food systems, rather than external shocks”.

The annual inflation report provided a deeper analytical perspective beyond monthly Consumer Price Index (CPI) releases by examining inflation through multiple lenses, including food versus non-food, goods versus services, local versus imported items, geography and item-level drivers.

Food remained the single largest driver of inflation, accounting for 51.6 percent of total inflation. With a weight of 42.7 percent in the basket, food recorded an average annual inflation rate of 17.4 percent, compared with 12.2 percent for non-food items, underscoring the central role of food in Ghana’s cost-of-living pressures.

Goods accounted for 79.2 percent of total inflation, compared with 20.8 percent for services, highlighting the stronger influence of tangible everyday consumption items over service-related costs.

Despite the sharp moderation in inflation during the year – from 23.5 percent in January to 5.4 percent in December – the report cautioned that lower inflation does not mean lower prices. Rather, it reflects a slower pace of price increases, meaning many households continued to grapple with elevated price levels and reduced purchasing power.

Regional basis

On a regional basis, inflation varied significantly across the country. The Upper West Region recorded the highest average inflation rate at 24.9 percent, while Bono East posted the lowest at 10.9 percent, reflecting disparities in market access, transport costs, supply chains and consumption patterns.

Item level

At the item level, inflation was concentrated in a small number of high-impact essentials. Rent emerged as the single largest contributor, accounting for 8.6 percent of total inflation, followed by electricity at 6.1 percent. Key food staples such as yam, smoked herrings, imported rice and river fish were also among the strongest contributors, reinforcing the dominant role of food and household essentials in inflation dynamics.

The report further observes that inflation was influenced by monetary and fiscal policy adjustments during the year. Fiscal consolidation, tighter borrowing limits and improvements in the primary balance supported the disinflation process, while the Bank of Ghana’s monetary policy response helped anchor inflation expectations and stabilise the macroeconomic environment.

Exchange-rate developments also played an important role. The report identifies exchange-rate stability as one of the most important drivers of disinflation in 2025, with the cedi’s appreciation helping contain imported inflation and ease external price pressures.

Recommendations

The report recommends strengthening food systems and supply chains, sustaining monetary-fiscal coordination, addressing regional disparities through targeted interventions and modernising inflation measurement to reflect changing consumption patterns. It argues that sustaining low and stable inflation will depend largely on improving food supply systems and reducing domestic cost pressures.

Looking ahead, GSS warned that inflation remains vulnerable to utility price adjustments, global energy price movements, exchange-rate volatility, food supply shocks and policy transitions. However, opportunities to sustain stability include stronger food systems, fiscal discipline, improved external buffers and tax adjustments that may ease business and consumer cost pressures.

Speaking at the launch, Government Statistician Dr. Alhassan Iddrisu described the report as a shift from merely reporting monthly inflation movements to explaining what is happening in the economy and why it matters.

“For years, we have published monthly inflation figures. They show movement. They show direction. But they don’t tell the full story,” he said, adding that the report brings together a full year of data to explain what happened to prices, what drove the changes and what they mean for households, businesses and the economy.

First Deputy Governor of the Bank of Ghana Dr Zakari Mumuni, in his remarks, described the annual report as an important analytical tool for understanding inflation dynamics beyond headline numbers, particularly the interaction between domestic and external drivers of price developments and their implications for monetary policy.

The report noted that while the country achieved one of the strongest inflation declines in 2025, sustaining price stability will require consistency, policy credibility and continued efforts to address structural bottlenecks in food systems, domestic production and market integration.