Finance Ministry highlights falling inflation, more potent Cedi in 2025 – Life Pulse Daily

Finance Ministry Highlights Falling Inflation, Stronger Cedi in 2025
The Ministry of Finance has outlined significant improvements in Ghana’s macroeconomic indicators, pointing to declining inflation, lower interest rates, and a stronger currency as evidence of a broad-based recovery in 2025.

Key Economic Improvements in 2025
The figures were detailed in a press statement issued on Monday, February 23, 2026. The statement indicated that real GDP growth reached a provisional 6.1 percent year-on-year in the first three quarters of 2025, largely driven by the services and agriculture sectors. Non-oil growth stood higher at 7.5 percent, compared to 5.8 percent over the same period in 2024.

Inflation, which had remained elevated at the end of 2024, fell steadily for 13 consecutive months, dropping from 23.5 percent in January 2025 to 3.8 percent by January 2026. The 91-day Treasury bill rate also declined significantly from 27.7 percent at the end of 2024 to 6.5 percent in February 2026, while average commercial lending rates eased from 30.25 percent in 2024 to 20.45 percent in 2025.

The cedi strengthened markedly against major international currencies, appreciating by 40.7 percent against the US dollar by the end of December 2025. It also gained 30.9 percent against the pound sterling and 24.0 percent against the euro. Ghana’s current account recorded a surplus of US$9.1 billion, with gross international reserves reaching US$13.8 billion, equivalent to 5.7 months of import cover.

Factors Driving Economic Recovery
According to the Ministry, the turnaround reflects coordinated fiscal and monetary policies aimed at stabilizing the economic environment and restoring investor confidence. It emphasized that maintaining macroeconomic stability remains central to the government’s agenda to deepen growth, expand private sector activity, and improve livelihoods.

The Ministry attributed the positive developments to several key factors:
• Effective implementation of fiscal consolidation measures
• Prudent monetary policy management
• Improved revenue mobilization
• Enhanced public financial management systems
• Favorable external sector developments

Sectoral Performance Analysis
The services sector continued to be the largest contributor to GDP growth, with significant improvements in telecommunications, financial services, and information technology. The agriculture sector also showed resilience, supported by favorable weather conditions and government interventions in the planting for food and jobs program.

The industrial sector, while showing moderate growth, faced challenges related to energy costs and access to credit. However, the manufacturing subsector benefited from the implementation of the one-district-one-factory initiative, which helped create jobs and boost local production.

Impact on Businesses and Consumers
The declining inflation rate has provided relief to businesses and households that had been grappling with high prices for several years. Lower interest rates have made credit more accessible to businesses, particularly small and medium enterprises that form the backbone of Ghana’s economy.

The stronger cedi has helped reduce the cost of imported goods and services, leading to lower prices for consumers. It has also reduced the burden of external debt servicing for the government and businesses with foreign currency-denominated loans.

Investment Climate Improvements
The improved macroeconomic indicators have enhanced Ghana’s attractiveness as an investment destination. The stable currency and declining inflation have reduced currency and inflation risks for foreign investors. The government has also implemented several investor-friendly policies, including tax incentives and streamlined business registration processes.

Foreign direct investment inflows have increased, particularly in sectors such as telecommunications, renewable energy, and manufacturing. The improved business environment has also encouraged local investors to expand their operations and explore new business opportunities.

Challenges and Future Outlook
Despite the positive developments, the Ministry acknowledged that challenges remain. These include:
• Ensuring fiscal sustainability while meeting development needs
• Addressing structural bottlenecks in key sectors
• Managing public debt levels
• Improving the business environment further
• Enhancing productivity and competitiveness

The Ministry projects continued economic growth in 2026, albeit at a more moderate pace. It expects inflation to remain within the Bank of Ghana’s target range of 6-10 percent, while the cedi is expected to maintain its stability against major trading currencies.

Policy Recommendations
To sustain the economic gains and address remaining challenges, the Ministry recommends:
• Continued fiscal discipline and expenditure rationalization
• Enhanced revenue mobilization through tax reforms and improved compliance
• Investment in infrastructure to reduce business costs
• Skills development and human capital enhancement
• Promotion of export diversification to reduce external sector vulnerabilities

The government also plans to deepen structural reforms in areas such as public financial management, procurement systems, and state-owned enterprise governance to improve efficiency and reduce waste.

Conclusion
The Finance Ministry’s report on Ghana’s economic performance in 2025 presents a positive narrative of recovery and growth. The significant improvements in key macroeconomic indicators demonstrate the effectiveness of coordinated policy interventions and provide a solid foundation for sustainable economic development.

While challenges remain, the trajectory suggests that Ghana is on the right path toward achieving its development goals. The continued implementation of sound economic policies, coupled with structural reforms and investment in human capital, will be crucial in maintaining the positive momentum and ensuring inclusive growth that benefits all segments of society.

As Ghana moves forward, the focus must remain on translating these macroeconomic gains into tangible improvements in living standards, job creation, and poverty reduction. The success of these efforts will ultimately determine the long-term sustainability of the economic recovery and Ghana’s progress toward its vision of becoming a prosperous, middle-income country.

Sources:
– Ministry of Finance, Ghana. (2026). Economic Performance Report 2025.
– Bank of Ghana. (2026). Monetary Policy Report.
– Ghana Statistical Service. (2026). Gross Domestic Product Report.

Frequently Asked Questions
Q: What caused the significant decline in inflation in 2025?
A: The decline in inflation was primarily due to coordinated fiscal and monetary policies, including tighter monetary policy, improved fiscal discipline, and enhanced revenue mobilization efforts.

Q: How has the stronger cedi affected businesses?
A: The stronger cedi has reduced the cost of imported inputs for businesses, lowered the burden of external debt servicing, and improved the competitiveness of export-oriented businesses.

Q: What sectors contributed most to Ghana’s economic growth in 2025?
A: The services and agriculture sectors were the main drivers of growth, with the services sector showing particular strength in telecommunications, financial services, and information technology.

Q: What challenges does Ghana still face despite the economic improvements?
A: Key challenges include ensuring fiscal sustainability, addressing structural bottlenecks, managing public debt levels, and improving productivity and competitiveness across sectors.

Q: How has the improved economic situation affected ordinary Ghanaians?
A: Ordinary Ghanaians have benefited from lower inflation, which has reduced the cost of living, and lower interest rates, which have made credit more accessible for businesses and individuals.