For the second month in a row, Ghana has decided to retain its interest rate, as it attempts to mitigate inflationary pressures.
- Ghana maintains interest rate at 27% for second consecutive month.
- Inflation profile remains high due to elevated food prices caused by adverse weather and supply-chain weaknesses.
- New administration’s tightening of fiscal policy expected to decrease price pressures and initiate disinflation process.
This decision was taken, in anticipation of price pressures decreasing, as the country’s new administration tightens fiscal policy.
The governor of the country’s central bank, Ernest Addison informed reporters during a press briefing in the capital, Accra, on Monday that the monetary policy committee maintained the rate at 27%.
“The inflation profile remains elevated,” Addison said, noting this was largely due to high food prices which he blamed on adverse weather and supply-chain weaknesses.
“It is expected that the disinflation process will resume contingent on renewed efforts on fiscal consolidation which is anticipated in the new administration’s economic policy,” he added.
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This is the first meeting since Cassiel Ato Forson was appointed finance minister by John Mahama, who also recently took office.
Forson is expected to unveil his first budget, by the end of March.
The highly anticipated budget is expected to have a significant impact on the trajectory of the West African country’s inflation, as seen on Bloomberg.
Ghana’s currency, the Cedi has lost almost 3.5% of its value versus the dollar since the year began, and inflation accelerated to an eight-month high of 23.8% in December.
The Bank of Ghana, however, estimates that the incoming administration will have a significant impact on inflation, as the consumer price index is expected to dip to single digits by the second quarter of 2026.
“All of that is predicated on the economic policy agenda which is yet to be crafted,” the new finance minister stated, adding that “by March we’ll get a better sense of the policy agenda.”
“It shouldn’t always be about revenue, we will be paying attention to expenditure,” he told lawmakers earlier this month.
