BoG expects inflation to return to target range

The Bank of Ghana (BoG) has projected that headline inflation will return to its medium-term target range of 8 ± 2%, provided there are no major economic shocks.

However, the Central Bank has warned that geopolitical tensions in the Middle East continue to pose significant upside risks to the inflation outlook, underscoring the need for a cautious monetary policy approach.

According to the BoG's May 2026 Monetary Policy Report, headline inflation recorded a marginal increase in April 2026, marking the first rise since the disinflation trend began in December 2024.

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The Bank attributed the increase mainly to movements in non-food items within the Consumer Price Index (CPI) basket.

"In the outlook, inflation is projected to trend into the medium-term target band of 8 ± 2%," the report stated.

Food inflation eased slightly to 2.2% in April 2026 from 2.3% in March, supported by improved food supply following a bumper harvest.

Non-food inflation, however, increased from 3.9% in March to 4.2% in April, driven largely by rising utility costs.

Despite the marginal increase in headline inflation, the BoG noted that its core inflation indicators, which exclude volatile components such as food and energy, continued to decline.

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The Central Bank said this suggests that the increase in inflation was not broad-based.

The report added that core inflation measures excluding food remained above headline inflation in April 2026, recording 4.2% and 4.7%, respectively.

DR/MA

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