Inflation eases to 12.1% in July, but household pressures persist

Headline inflation’s rate fell to 12.1 percent in July 2025, down from 13.7 percent the previous month – marking the lowest level since October 2021 and extending a seven-month disinflationary trend, according to data released by the Ghana Statistical Service (GSS).

This decline represents a cumulative drop of 11.7 percentage points from the peak of 23.8 percent recorded in December 2024 as price pressures ease across both food and non-food categories. However, the 0.7 percent month-on-month increase in prices signals that underlying inflationary momentum remains.

“This is a real shift, not just a blip. But we must pay close attention to the short-term price movements, especially in services and some food staples,” Government Statistician Dr. Alhassan Iddrisu said in the release.

Food inflation remains largest contributor to the headline rate, but eased to 15.1% year-on-year for July from 16.3% in June. Prices of key staples such as cereals and vegetables fell, though items like yam, smoked herring and ginger saw sharp increases. Food accounted for more than half of the 12.1 percent total.

Non-food inflation also declined, falling to 9.5 percent from 11.4% the previous month. Services inflation – covering rent, education, transport and healthcare – fell to 6.2 percent, yet posted a month-on-month increase of 1.3 percent; outpacing the increase of goods prices which rose 0.5 percent.

Notably, imported inflation dropped to 10 percent in July from 12.5 percent in June – reflecting relative exchange rate stability and lower freight costs. Still, local items – which make up 73 percent of the CPI basket – saw a more modest drop to 12.9 percent with a monthly increase of 0.9 percent.

Regional disparities in inflation have widened. Upper West Region recorded the highest annual rate at 24.8 percent, more than double the national average. Although down from 32.3 percent in June, the region remains burdened by surging costs in food, housing and utilities. In contrast, Central Region recorded the lowest inflation at 7.7 percent.

Among main drivers of inflation at the item level were smoked herring, yam and ginger, all of which posted inflation above 20 percent in July, with ginger recording a spike to 128.4 percent. Electricity and rent, two high-weight non-food items, posted sharp decelerations; helping to dampen overall inflation.

Three key categories – food and non-alcoholic beverages, housing, water, electricity and gas; and clothing and footwear – accounted for nearly 80 percent of July’s headline inflation.

Despite the headline easing, inflation remains uneven across income groups and regions. The GSS warned that services inflation, which directly affects urban and middle-income households, could reverse the recent progress if left unaddressed.

“While headline inflation has moderated, the structure of inflation shows that services, energy and protein-rich food items are seeing renewed pressures. This calls for targetted policies, not broad-stroke solutions,” Dr. Iddrisu noted.

The GSS urged households to adopt energy-saving practices and bulk purchasing, while advising government to tailor support interventions to high-inflation regions like Upper West Region.

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