Ghana’s Inflation Drops to 3.8% in January 2026: Lowest Since 2021 Rebasing

Introduction

In a significant economic milestone, Ghana’s inflation rate has fallen to 3.8% in January 2026, marking the lowest level since the country’s price rebasing in 2021. This thirteenth consecutive decline represents a dramatic improvement in the nation’s economic stability and offers renewed hope for households and businesses grappling with high living costs. The latest Consumer Price Index (CPI) data, released by the Ghana Statistical Service, reveals a remarkable turnaround from the double-digit inflation rates that plagued the country in recent years.

Key Points

Background

Ghana’s battle with inflation has been a central economic challenge over the past several years. Following the global economic disruptions caused by the COVID-19 pandemic, supply chain issues, and external shocks including the Ukraine conflict, the country experienced a sharp rise in prices that peaked at alarming levels. The government and the Bank of Ghana implemented various monetary and fiscal policies to combat rising inflation, including interest rate hikes, tighter monetary policy, and measures to stabilize the local currency.

The rebasing of the Consumer Price Index in 2021 was part of efforts to improve the accuracy of inflation measurement and ensure that the basket of goods and services better reflected current consumption patterns. Since then, authorities have been closely monitoring price movements across different sectors and regions to implement targeted interventions where necessary.

Analysis

The January 2026 inflation figure of 3.8% represents a dramatic improvement from the 23.5% recorded in January 2025, a 19.7 percentage-point decline that signals effective policy implementation. This sustained disinflation trend suggests that the combination of tighter monetary policy, improved fiscal discipline, and enhanced supply chain management is bearing fruit.

Several factors have contributed to this positive development. First, the stabilization of global commodity prices, particularly for food and energy, has reduced cost pressures. Second, the Bank of Ghana’s monetary policy measures, including maintaining relatively high policy rates, have helped anchor inflation expectations. Third, government initiatives to boost local food production have improved food security and reduced dependence on expensive imports.

The data reveals interesting patterns across different categories. Food inflation, which typically affects lower-income households more severely, has shown significant improvement, declining to 3.9% from 4.9% the previous month. This suggests that agricultural policies and interventions in the food supply chain are working. Non-food inflation has also moderated considerably, indicating broader-based price stability.

However, the data also highlights persistent regional disparities. The North East Region’s inflation rate of 11.2% contrasts sharply with the Savannah Region’s 2.6%, pointing to structural challenges that require targeted interventions. These differences are largely attributed to variations in local supply conditions, transportation costs, and market access.

The divergence between local and imported goods inflation is particularly noteworthy. Local goods inflation at 2.0% versus 4.3% for imports suggests that Ghana’s domestic production is becoming more competitive, which could support import substitution policies and boost local industries.

Practical Advice

For consumers and businesses navigating this evolving economic landscape, several strategies can help maximize the benefits of declining inflation:

**For Households:**
– Review household budgets as price stability improves purchasing power
– Consider fixed-rate loans before potential future interest rate adjustments
– Invest in local agricultural products which are showing more price stability
– Take advantage of seasonal price patterns as supply chains stabilize

**For Businesses:**
– Reassess pricing strategies as input costs stabilize
– Consider expanding inventory as price volatility decreases
– Explore opportunities in regions with lower inflation rates for cost advantages
– Invest in local sourcing to benefit from lower inflation in domestic goods

**For Investors:**
– Monitor the Bank of Ghana’s monetary policy stance for investment signals
– Consider sectors that benefit from stable inflation, such as consumer goods
– Evaluate opportunities in regions with stronger price stability
– Watch for signals about potential interest rate adjustments

FAQ

Conclusion

Ghana’s achievement of a 3.8% inflation rate in January 2026 represents a significant economic victory that has been years in the making. The thirteenth consecutive month of declining inflation demonstrates the effectiveness of coordinated monetary and fiscal policies, as well as improvements in domestic production and supply chain management. While regional disparities remain a challenge requiring targeted interventions, the overall trend points toward greater economic stability and improved living standards for Ghanaians.

The moderation in both food and non-food inflation suggests that the benefits of price stability are being broadly shared across the economy. The divergence between local and imported goods inflation also indicates growing competitiveness in domestic production, which could support long-term economic transformation. As inflation continues to ease, policymakers will need to remain vigilant to ensure that these gains are sustained and that the benefits reach all regions of the country.