Although the recent policy rate cut by the Bank of Ghana has been widely welcomed, IMANI Africa has indicated that the economic growth prospects in the second half of 2025 will not be determined by just the cut.
The growth trajectory in the second half of the year, IMANI says, will be determined by factors beyond just the rate cut.
For the public policy think tank, the complex interplay between inflation, exchange rates, credit infrastructure, and bank lending practices will play a decisive role in shaping the country’s growth trajectory.
Members of the Monetary Policy Committee (MPC), in their decision at the last meeting, indicated readiness to ease monetary policy further should conditions improve. However, IMANI insists that the real impact of such moves will depend on how well rate adjustments are transmitted into the broader economy.
Cutting policy rates, IMANI says, will mean little if banks remain cautious in lending or if businesses cannot access affordable credit.
Inflation, the think tank identifies to be a critical factor for growth for the remaining part of the year. Though easing from the record high of recent years, it remains a major risk factor. Should price pressures surge, it will erode household purchasing power and dampen consumer demand, limiting the speed of economic recovery.
The exchange rate or the forex operations, IMANI indicates, adds another layer of vulnerability. A weakening cedi could push import prices higher, undoing gains from disinflation and further straining businesses that rely heavily on imported inputs.
Another critical which has eluded many analysts, IMANI identifies as credit infrastructure and bank lending behavior. Should banks adopt stricter lending conditions, many small and medium-sized enterprises, the backbone of job creation, struggle to access capital.
This limits private sector growth, which is critical for sustaining economic momentum.
Global headwinds, including volatile commodity prices, tightening external financing conditions, and geopolitical uncertainties, further complicate the outlook. It is obvious that the gains the economy has made in recent months are partly attributed to favourable global headwinds. The rise in the prices of gold and cold and the tumble of the US dollar have been an advantage to the Ghanaian economy.
Given the susceptibility of Ghana’s economy, any external shock could easily derail the fragile recovery if Ghana’s domestic policy responses are not carefully calibrated.
“Beyond headline rate adjustments, the interplay between inflation, exchange rates, credit infrastructure, and bank lending practices will define Ghana’s growth trajectory in the latter half of 2025,” IMANI mentioned in its analysis cited by The High Street Journal.
It continued, “As the central bank signals readiness for further easing, close monitoring of transmission channels, borrower risk profiles, and global headwinds remains crucial for policymakers, financial institutions, and businesses alike.”
For IMANI, Ghana’s growth in the latter half of 2025 will hinge not just on macro-level adjustments, but on whether the financial system can effectively channel cheaper credit into productive sectors, while shielding households and businesses from inflation and currency shocks.
It therefore calls on policymakers, financial institutions, and businesses to deploy a balancing act so that the interplay of these factors will lead to a favourable outcome for the entire economy.
