The Governor of the Bank of Ghana, Dr. Johnson Asiama has indicated that while inflation remains a concern, future rate adjustments will depend on economic developments.
He acknowledged the progress in tackling inflation but insists that additional measures are required to bring it down to desired levels.
Addressing the press after the 123rd Monetary Policy Committee meeting, Dr. Johnson Asiama stressed the need for sustained policy efforts to maintain price stability and ease the cost of living pressures on businesses and households.
“As inflation becomes firmly anchored, the Committee will reassess the scope for a gradual easing in the policy stance,” he said.
As of February 2025, Ghana’s inflation rate stood at 23.2%, reflecting a steady decline from the peak of 54.1% recorded in December 2022.
The BoG attributes this progress to tight monetary policies, improved food supply conditions, and relative stability in the foreign exchange market. However, inflation remains above the central bank’s target range of 6–10%, prompting calls for further action.
“The disinflation process is ongoing, but risks remain. To consolidate these gains, monetary and fiscal discipline must be maintained while addressing supply-side constraints that contribute to inflationary pressures.” he added.
The Bank of Ghana already raised the policy rate by 100 basis points to 28.0%, citing persistent inflationary pressures and the need to maintain macroeconomic stability. The move, it notes, is intended to re-anchor inflation expectations and prevent second-round effects from elevated food and non-food prices.
Macroeconomic Trends
Ghana’s economy recorded stronger-than-expected growth in 2024, with real GDP expanding by 5.7%, driven by robust performance in the industry and services sectors.
However, inflationary pressures persisted, largely due to supply chain disruptions, adverse weather conditions affecting agriculture, and fiscal slippages.
On the fiscal side, the government’s 2024 deficit widened to 7.9% of GDP, significantly above the target of 3.8%. This expansionary stance contributed to a liquidity overhang, prompting the central bank to tighten monetary policy.