Inflation drop good news, but sustainability is key – Dr Stephen Amoah

Former Deputy Finance Minister, Dr Stephen Amoah, has described Ghana’s recent drop in inflation to single digits as positive news but cautioned that the real test lies in sustaining the gains and ensuring that Ghanaians, particularly the private sector, feel the impact.

Ghana’s year-on-year inflation rate fell to 3.3 per cent in February 2026, marking the 14th consecutive monthly decline and the lowest level recorded since the 2021 rebasing of the Consumer Price Index (CPI).

Speaking on the economic outlook, Dr Amoah noted that while the disinflation trend signals progress, it must be supported by consistent fiscal discipline and monetary stability to deliver meaningful economic relief.

“This is good news, especially considering that inflation peaked at about 54.1 per cent during the COVID-19 period. It later declined to around 22 per cent by the last quarter of 2024, and now we are in single digits. That is significant progress,” he said.

He attributed the improvement largely to the government’s tight fiscal policy and adherence to strict monetary measures, partly influenced by International Monetary Fund (IMF) programme conditions.

The Nhyiaeso MP explained that fiscal consolidation efforts, including restrained government spending, combined with tight monetary policy rates, have helped stabilise prices. Seasonal factors, particularly improvements in food supply, have also contributed to easing inflationary pressures.

However, he raised concerns about bank lending rates, noting that despite reductions in the policy rate, borrowing costs for households and businesses remain high, between 17 and per cent.

“If the policy rate has reduced, and the reference rate suggests banks should add about five per cent, then lending rates should be moderating accordingly. But some banks are yet to fully comply. We need to examine the correlation between these macroeconomic indicators and actual lending conditions,” he stressed.

Dr Amoah called for closer monitoring of the transmission mechanism between policy rate adjustments and commercial bank lending rates to ensure businesses and individuals benefit from the improving macroeconomic environment.

He further emphasised the importance of resilience and redistribution of economic gains across sectors, warning that achieving single-digit inflation through tight expenditure controls is only part of the challenge. Sustaining it requires structural discipline and long-term economic independence.

“We must build the needed resilience as a country and ensure that these gains are not temporary. The focus should now be on sustainability and ensuring that all stakeholders benefit,” he added.

MyJoyOnline