- Ghana’s economy is showing early signs of stabilization, supported by policy reforms and improvements in both domestic and external economic fundamentals.
- Inflation declined to 21.2% in April 2025, marking a significant drop from recent highs, though it still remains above the central bank’s medium-term target of 8 ± 2 percent.
- The Ghana cedi appreciated by nearly 19% between April and May 2025, helping to ease imported inflation and boost public confidence in the economy.
- In March 2025, the Bank of Ghana increased the Monetary Policy Rate by 100 basis points to 28%, aiming to further control inflationary pressures.
- The central bank is transitioning from the unremunerated Cash Reserve Ratio to a more active Open Market Operations framework, using longer-tenor instruments to enhance policy transmission and liquidity management.
- Despite improvements, inflation risks remain significant, due to potential second-round effects, food supply challenges from northern Ghana and the Sahel, and global commodity price volatility.
- Global geopolitical tensions and trade disputes pose risks to Ghana’s economy, as they can influence exchange rates, commodity prices, and financial flows in emerging markets.
- Ghana has made notable macroeconomic progress, including reaching a Staff-Level Agreement with the IMF and securing a sovereign credit rating upgrade from S&P to CCC+.
- External sector indicators have strengthened, with improvements in foreign reserves, a better trade balance, and rising business and consumer confidence.
So what?
All eyes now turn to Friday, when the Monetary Policy Committee is expected to announce its final decision, a move that could define the next phase of Ghana’s economic direction.
