In this Brief:

Ghana Inflation Report – May 2026: Rising Food Prices Drive Upward Trend

Ghana’s headline inflation rose to 3.7% year-on-year in May 2026, up from 3.4% in April, marking the second consecutive increase and signaling a reversal in the disinflation trend.

On a month-on-month basis, inflation edged higher to 1.1% from 1.0%, indicating sustained price pressures across the economy.

Food Inflation Drives Headline Increase

Food inflation emerged as the primary driver of the May increase, rising sharply to 3.3% year-on-year from 2.2% in April.

Monthly food prices recorded a 2.0% increase, reinforcing the strength of food-related pressures.

The food and non-alcoholic beverages category became the largest contributor to headline inflation (38.5%), overtaking housing, water, electricity, gas, and other fuels, which accounted for 32.6%.

Key food items recorded significant price increases, including:

• Fresh tomatoes (+38.8%)
• Ginger (+12.3%)
• Plantain (+10.7%)

Food inflation pressures were driven by supply shortages in key staples, increased transport and distribution costs, and supply-side constraints extending beyond typical seasonal patterns. Food’s significant weight of 42.7% in the CPI basket amplifies its impact on headline inflation.

Changing Inflation Dynamics

The composition of inflation in May reflects a shift in underlying drivers:

• Food inflation strengthened and became dominant
• Non-food inflation eased to 4.1%
• Services inflation remained elevated at 9.9%, indicating persistent price stickiness

This indicates that inflation pressures are increasingly concentrated in supply-sensitive sectors, particularly food.

External Pressures on Inflation

Elevated global and domestic factors continue to pose upside risks to inflation.

Brent crude oil prices remained high throughout May, before easing slightly toward the end of the month and closing near USD 94 per barrel, contributing to higher energy and transport costs.

The Ghana cedi depreciated by approximately 11% against the US dollar between January and May 2026, reflecting sustained foreign exchange demand from the energy sector, corporates, and dividend-related outflows.

The combination of elevated oil prices and currency weakness continues to exert upward pressure on domestic prices and represents a key near-term inflation risk.

Inflation Outlook

Inflation is expected to continue trending upward, with projections indicating a 5.5% to 6.5% range for June 2026, largely driven by unfavorable base effects.

Food price pressures and crude oil price movements remain the primary risks to the inflation outlook.

Monetary Policy Implications

The Bank of Ghana is expected to maintain the policy rate at 14% at the next Monetary Policy Committee meeting scheduled for July 20–22, 2026.

A key policy adjustment includes the revision of the Cash Reserve Requirement (CRR) to a uniform 20%, effective June 4, 2026.

This change is expected to:

• Reduce reserve requirements for most banks
• Increase requirements for one bank
• Unlock approximately GHS 12 billion in liquidity across the banking sector.

The increase in liquidity introduces additional upside risks to inflation.

Fixed Income Market Implications

Rising inflation and elevated global uncertainty are expected to support upward movements in yields. Investors are likely to reprice near-term inflation risks, leading to increased yields across the fixed income market.

Conclusion

The May 2026 inflation data reflects a clear shift in Ghana’s inflation dynamics, with food inflation re-emerging as the dominant driver. Persistent supply-side pressures, combined with external risks such as high crude oil prices and currency depreciation, are expected to keep inflation elevated in the near term.y” inflation and cautious monetary policy as the BoG manages these emerging global spillovers.