The Bank of Ghana (BoG) has maintained its monetary policy stance at 14.0 percent after assessing both domestic economic performance and growing global uncertainties.
Governor of BoG Dr. Johnson Pandit Asiama revealed that Ghana’s economy remains resilient despite renewed geopolitical tensions and rising global energy prices.
Addressing journalists at the 131st Monetary Policy Committee (MPC) press briefing on Wednesday July 22, Dr. Asiama said the Committee reviewed recent economic developments from July 20 to July 22, 2026, before taking its decision on the monetary policy rate.
According to him, while Ghana’s economic fundamentals remain strong, renewed conflict in the Middle East and its impact on global oil markets pose significant risks to inflation and economic growth.
The Governor noted that the easing of geopolitical tensions witnessed in mid-June was short-lived after fresh hostilities led to renewed disruptions, including the closure of the Strait of Hormuz, causing instability in global energy markets.
Despite these challenges, he said global economic activity has remained relatively resilient, supported by strong investments in artificial intelligence, particularly in the United States and China, as well as increased crude oil inventory releases to ease supply shortages.
He disclosed that the International Monetary Fund (IMF) projects global growth at 3.0 percent in July 2026, broadly unchanged from the 3.1 percent forecast in April, but cautioned that any further escalation of the conflict could weaken the global economic outlook.
Dr. Asiama explained that crude oil prices have rebounded above US$85 per barrel, slowing the pace of global disinflation and prompting many central banks to pause planned interest rate cuts.
He warned that although financing conditions remain generally favourable across advanced and emerging economies, rising inflationary pressures could lead to tighter global financial conditions, posing challenges for developing countries such as Ghana.
On the domestic front, the Governor announced that Ghana’s economy continued to expand strongly during the first quarter of 2026.
Real Gross Domestic Product (GDP) grew by 6.4 percent, driven mainly by the services and industrial sectors.
He added that the Bank’s Composite Index of Economic Activity (CIEA), which measures high-frequency economic indicators, recorded 13.4 percent annual growth in May 2026, compared with 4.4 percent during the same period last year.
According to him, the growth was supported by increased private sector credit, improved international trade, higher industrial production and a rebound in tourist arrivals.
The Governor also indicated that confidence surveys conducted in June showed improving optimism among businesses and consumers due to stronger economic prospects, lower lending rates and subdued inflation.
Headline inflation increased from 3.7 percent in May to 5.3 percent in June 2026, driven by increases in both food and non-food prices.
Food inflation rose to 3.9 percent** from 3.3 percent, while non-food inflation increased to 6.3 percent from 4.1 percent.
Despite the increase, Dr. Asiama stressed that inflation remains below the Bank’s medium-term target range of 8 ± 2 percent.
He attributed the rise mainly to base effects and temporary increases in transport fares following higher global crude oil prices.
The Governor further noted that core inflation, which excludes energy and utility prices, also increased, while inflation expectations among consumers, businesses and banks remained broadly anchored within the target range.
The MPC observed significant improvements in monetary conditions.
Reserve money expanded by 31.7 percent in June 2026 compared with 2 percent a year earlier, largely due to stronger foreign assets and changes in reserve requirements.
Broad money supply (M2+) also grew by 28.5 percent, up from 15.6 percent in June 2025.
Meanwhile, interest rates continued to decline.
The yield on the benchmark 91-day Treasury Bill fell sharply to 5.3 percent** from 14.7 percent a year ago.
Similarly, the Ghana Reference Rate eased to 10 percent, down from 23.8 percent, while average lending rates dropped to 15.6 percent from 27 percent.
The easing credit environment contributed to a sharp increase in private sector lending, with credit expanding by 41.2 percent compared with 8.6 percent during the same period last year.
In real terms, private sector credit recorded 34.1 percent year-on-year growth.
By 1960news.com
