The Bank of Ghana (BoG) has kept its monetary policy rate unchanged at 27% for the second consecutive meeting, citing the need to tackle elevated inflation risks while supporting Ghana’s economic recovery.
The decision comes after Ghana missed its 2024 end-year inflation target of 15%, with inflation rising to 23.8% in December – the highest in eight months. According to BoG Governor Dr. Ernest Addison, the inflation profile remains elevated, driven mainly by food price movements.
Climate factors, such as dry spells and late rains, negatively affected food production, while supply chain challenges further worsened food prices.
Despite these challenges, Dr. Addison expressed optimism about a resumption of the disinflation process, contingent on fiscal consolidation efforts under the new administration’s economic policy agenda and the 2025 budget statement.
Ghana’s consumer inflation remains above the BoG’s medium-term target of 8% ± 2%, but the Bank’s latest forecast indicates a gradual return to the path of disinflation, albeit at a slower pace.
The Bank’s decision to maintain the monetary policy rate reflects its commitment to managing inflation and ensuring macroeconomic stability, crucial for sustaining Ghana’s economic recovery.