The Central Bank of Ghana kept its policy rate steady at 27% at its Monetary Policy Committee meeting this week and explaining that the decision is based on the growth projection for 2025.
Also, the Bank noted that external conditions remain positive, with stronger-than-programmed rebuilding of reserve buffers contributing to the stability of the domestic currency contributing to positive results, explaining that growth in gold exports, has also helped stabilise the economy.
It added that the improvement in domestic macroeconomic conditions is also expected to bolster debt servicing capabilities of corporate and household sectors, which would help mitigate further build-up of NPLs within the industry.
The report also said that inflationary trends remained high, particularly in the last quarter of the year, due to food price volatility, while weather-related factors such as drought and heavy rainfall in some parts of the country harmed crop production.
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While food prices have fallen due to disruptions in production, weak supply chains often affect food prices. Although the inflation rate is not at the targeted level in 2024, the deflationary process is likely to start again due to the new government’s economic policies and renewed efforts towards fiscal consolidation.
The Central Bank’s latest economic forecasts indicate that inflation will fall and enter a deflationary path, while an average target of 8.2 per cent can be achieved in the long term.
