Fitch Sees Inflation Rebounding to 9% by Year-End, Challenging Government’s 5% Forecast

Fitch Solutions has warned that Ghana’s rapid disinflation may prove temporary, forecasting consumer inflation to rise to 9% by the end of 2026, significantly above the government’s more ambitious 5% year-end target, as expectations grow that the Ghana cedi will lose some of the strength that has helped tame prices in recent months.

Presenting the firm’s outlook during PwC Ghana’s webinar on the 2026 Mid-Year Budget Review, Associate Director Mike Kruiniger said the recent decline in inflation had been underpinned largely by the cedi’s appreciation, a trend the research firm does not expect to continue at the same pace.

According to Fitch Solutions, the Bank of Ghana’s evolving monetary policy stance and a likely moderation in cedi gains will gradually reintroduce imported inflation into the economy, pushing headline inflation higher over the remainder of the year.

The projection contrasts sharply with Finance Minister Dr Cassiel Ato Forson’s insistence that inflation will decline to 5% by December, despite global geopolitical uncertainties. The Ministry of Finance continues to maintain an official target range of 8%, plus or minus two percentage points, arguing that ongoing fiscal consolidation and prudent expenditure controls remain sufficient to anchor prices.

Speaking at the same event, Technical Advisor to the Finance Minister Dr Theo Acheampong reaffirmed government’s confidence in its macroeconomic assumptions, noting that no supplementary financing was requested in the Mid-Year Budget because expenditure management is expected to keep public finances on track.

Looking further ahead, Fitch Solutions expects inflationary pressures to intensify, forecasting inflation of 13.2% by the end of 2027. The firm attributes that outlook to stronger domestic demand, renewed imported inflation from a weaker cedi, and higher food prices linked to potential El Niño-related weather disruptions.

Despite the inflation warning, the research house remains optimistic about Ghana’s broader economic trajectory.

Fitch forecasts GDP growth of 5.7% in 2026, outperforming the country’s decade-long average of 4.9%, supported by resilient consumer demand and sustained expansion in the mining sector, particularly as elevated gold prices continue to strengthen Ghana’s external position.

The firm also endorsed the government’s fiscal consolidation programme, projecting a commitment-basis fiscal deficit of 1.7% of GDP, below the official target of 2.2%, reflecting restrained development spending and lower borrowing costs.

However, Fitch cautioned that external risks remain significant. A more aggressive US Federal Reserve could weaken gold prices and tighten global financial conditions, while a stronger-than-expected El Niño episode could intensify food inflation and place renewed pressure on household purchasing power.

The divergent inflation forecasts underscore one of the central debates surrounding Ghana’s economic recovery: whether recent price stability reflects durable structural improvements or temporary support from favourable exchange-rate dynamics that may prove difficult to sustain.