Editorial: Economy given clean bill of health

Bank of Ghana Governor Dr. Johnson Pandit Asiama is confident the economy has “turned a decisive corner”, expressing confidence that the disinflation gains recorded in this year may extend into a multi-year low-inflation regime.

Indeed, BoG says the economy is entering a sustained period of price stability with inflation projected to settle between 4 percent and 6 percent by year-end and remain within the target band through 2026.

Dr. Asiama made this observation at the 127th Monetary Policy Committee meeting’s opening in Accra this week, where he said conditions entering the meeting were the most favourable in several years.

Expectations remain well anchored as currency stability, improved foreign-exchange operations and stronger reserve inflows support the macro-outlook. Dr. Asiama said gross reserves had risen above US$11billion, providing 4.8 months of import cover while the cedi’s resilience in 2025 reflected stronger market confidence and reforms in FX operations.

The policy rate was reduced to 25 percent in July and later to 21.5 percent in mid-September as price pressures declined faster than expected.

The Governor noted that staff analysis indicates scope for more gradual rate cuts; however, he stressed that the Committee must “preserve credibility and avoid undermining the disinflation case”.

That notwithstanding, analysts expect the easing cycle to continue – with forecasts suggesting the policy rate could fall below 20 percent by year-end, barring any excessive shocks.

Economic activity remained strong through the year. The country recorded 6.3 percent GDP growth in the first half, with non-oil GDP expanding 7.8 percent driven by agriculture and services. High-frequency indicators also showed momentum, with the composite index of economic activity rising about 9 percent.

However, Dr. Asiama cautioned that global risks still pose challenges.

 

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