The Bank of Ghana’s Monetary Policy Committee (MPC) has decided to maintain its benchmark interest rate at its first meeting of the year.
This decision comes as the global economy presents a mixed outlook, with steady growth but persistent inflationary concerns.
In a press release, the MPC highlighted that global economic growth remained strong through 2024, particularly driven by the US and China. However, the Committee also noted the growing uncertainty around trade protectionism and geopolitical tensions, which could undermine business and consumer confidence, ultimately dampening growth prospects for 2025.
Although global inflation has been on a downward trend, the MPC raised concerns about ongoing inflationary pressures in the services sector and the tight labor market.
The MPC expects that financial conditions will gradually ease as the policy stance becomes more accommodative, with inflation in the United States and the Euro Area expected to cool down.
The Committee emphasized its commitment to closely monitoring both global and domestic economic conditions and is prepared to adjust the monetary policy stance if necessary to ensure price stability and foster sustainable growth.
“Global growth is forecast to remain stable in 2025, supported by low inflation, steady employment growth, and a favorable monetary policy stance. However, increased uncertainty surrounding trade protectionism and geopolitics may dampen business and consumer confidence, which could negatively impact the growth outlook for 2025.”
“The decline in inflationary pressures is mainly attributed to lower crude oil prices and the effects of tighter monetary policies. However, there are still signs of inflationary pressures in the services sector, along with tight labor market conditions. Looking ahead, global headline inflation is projected to continue to decline in 2025 and 2026, primarily due to slower wage growth.”
Source: Ghana/Starrfm.com.gh/103.5FM/Deborah Amuzu
