Global crises pose medium-term inflation risks – PwC 

By Kingsley Webora TANKEH

PricewaterhouseCoopers (PwC) Ghana has warned that emerging global crises pose risks to inflation in the medium-term as supplyside shocks occasioned by the crises are expected to feed into inflation during coming months.

According to PwC Ghana’s commentary on February 2026 Consumer Price Index (CPI), trade flow disruptions across the Sahel – driven by terrorist activity – are already creating some volatility in key food supply chains that could elevate inflation expectations.

“Disruptions to regional trade flows – particularly across Sahelian corridors affected by terrorist activity – pose a risk of elevating inflation expectations as key food supply chains become more volatile,” the firm stated.

The professional services firm warned that ongoing conflict in the Middle East is also expected to exert upward pressure on energy-related components of the inflation basket. These threaten the disinflation trajectory the country has been on for 14 months.

According to latest data from the Ghana Statistical Service (GSS), headline inflation declined for the 14th consecutive month – from 3.8 percent in January to 3.3 percent for February 2026, the lowest level since the 2021 CPI rebasing. Month-on-month inflation however increased moderately to 0.8 percent from 0.2 percent in January.

The February data also showed that global pressures have temporarily eased. Imported inflation dropped to 0.6 percent, down from 2.0 percent in January – suggesting that global price shocks are not transmitting into the domestic economy at the same intensity as previous years.

Inflation for locally produced items moderated to 4.5 percent, signalling that domestic cost structures may be stabilising. Food inflation eased to 2.4 percent from 3.9 percent in January, with food prices growing marginally by 0.2 percent month-on-month.

However, non-food inflation edged up slightly to 4 percent. The largest upward pressure on the CPI in February came from housing and utilities, which posted a year-on-year inflation of 12.6 percent – the top contributor to overall inflation. Transportation – influenced by lower energy costs such as petrol, diesel and gas – posted a negative inflation of -7.5 percent.

Despite these gains, PwC maintained that the most significant threat to Ghana’s inflation trajectory stems from regional insecurity crises affecting trade corridors.

While PwC acknowledged these could be transitory, the professional services firm argued that they could potentially interrupt what has been a sustained disinflationary trend since early 2025. “Concurrently, the ongoing conflict in the Middle East is likely to exert upward pressure on energy-related components of the inflation basket in coming months, increasing the possibility of a temporary interruption to the recent disinflationary trend,” it noted.

With receding inflationary pressures – headline inflation now below the Bank of Ghana’s (BoG) medium-term target band of 8±2 percent and reduced exchange rate volatility – the firm indicated that earlier tightening measures have taken effect.

This, according to PwC Ghana, presents a strong case for a further policy rate cut. Although the decision will depend on BoG’s assessment of exchange rate stability, fiscal consolidation commitment, external financing flows and expected impact of emerging supply-side shocks, the firm argued that considering these positive macroeconomic factors, the probability of a policy rate cut is higher than for a hold.

“If concerns about global financial conditions or domestic liquidity risks persist, the MPC may opt for a cautious hold,” PwC Ghana noted. “However, the data strongly support a measured reduction in the policy rate to stimulate credit, ease borrowing costs and reinforce the macroeconomic recovery.”

“At 3.3 percent, inflation is not only anchored but showing sustained stability – supported by both food and non-food categories. This provides the Bank with strong justification to consider a rate cut to support economic activity,” it added.

However, the medium-term risks are expected to intensify due to emerging supply-side shocks beyond Ghana’s borders.

The Monetary Policy Committee (MPC) is expected to convene on March 15 to deliberate on the policy rate and is expected to issue a stance at the three-day meeting’s close on March 18, 2026.

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