Bank of Ghana maintains Policy Rate at 27% amid elevated inflation and economic recovery efforts
The Bank of Ghana (BoG) has kept its monetary policy rate unchanged at 27 percent for the second consecutive meeting, a move aimed at tackling elevated inflation risks while supporting Ghana’s economic recovery.
The decision comes in the wake of Ghana missing its 2024 end-year inflation target of 15 percent, with inflation rising to 23.8 percent in December—the highest in eight months.
Addressing the first Monetary Policy Committee (MPC) press briefing for 2025 at the Central Bank's new headquarters, Bank Square, today, the Governor Dr Ernest Addison said the Bank is maintaining a cautious stance due to persistent inflationary pressures and global economic uncertainties.
“The inflation profile remains elevated largely driven by food price movement, especially, in the last quarter of the year. The climate factors including dry spells in some parts of the food-growing communities of the country and the late onset of rains negatively affected production,” Dr Addison stated.
He added that supply chain challenges further worsened food prices, contributing to the deviation from the inflation target. Despite this, he noted optimism about a resumption of the disinflation process, contingent on fiscal consolidation efforts under the new administration’s economic policy agenda and the yet-to-be-presented 2025 budget statement.
“While the inflation outturn for 2024 deviated from the target, it is expected that the disinflation process will resume contingent on renewed efforts at fiscal consolidation which is anticipated in the new administration economic policy agenda and the yet-to-be-presented 2025 budget statement,” he explained.
Ghana’s consumer inflation remains significantly above the BoG’s medium-term target of 8% ± 2%. However, the Bank’s latest forecast indicates a gradual return to the path of disinflation, though achieving this goal is expected to take longer.
“The bank’s latest inflation focus shows a steady decline and returns to the path of disinflation with an extended time of rising in achieving the medium target of 8+- 2%. Under the circumstances the committee decided to keep the monetary policy rate unchanged at 27%,” Dr Addison said.
Dr Addison highlighted that the monetary policy decision reflects the Bank’s commitment to managing inflation and ensuring macroeconomic stability, critical for sustaining the recovery of the West African gold and cocoa producer.