Ghana’s inflation rate is easing but remains high at over 23 percent, while economic growth continues to progress at a slow pace, according to the Governor of the Bank of Ghana, Dr. Johnson Asiama.
Speaking at the 123rd Monetary Policy Committee (MPC) meeting on March 24, 2025, he outlined key macroeconomic challenges, emphasizing the need for stronger fiscal policies and structural reforms.
“While inflation is easing, it remains uncomfortably high, at over 23 percent, and progress has been slow, particularly on a month-on-month basis. For instance, structural drivers of food inflation remain persistent,” Dr. Asiama stated.
He noted that Ghana’s external economic environment, though currently supportive, is becoming increasingly volatile.
“We’ve seen a strong trade surplus and solid reserve build-up on the back of gold exports and remittance flows. But a possible escalation in global tariff wars, rising geopolitical tensions, and weakening Chinese demand could quickly shift the dynamics,” he said, adding that such global factors could impact inflation, capital flows, and exchange rate stability.
Domestically, Dr. Asiama pointed out that Ghana’s fiscal outlook in 2024 was expansionary, with the deficit exceeding program targets. However, there are signs of fiscal consolidation in 2025, though uncertainties remain. “Questions remain as to whether current measures are adequate to anchor expectations and satisfy upcoming IMF program reviews,” he remarked.
Dr. Asiama acknowledged that some of these economic challenges stem from past monetary and fiscal policy missteps. “Loose fiscal policy during periods of macro stress, weak monetary-fiscal coordination, and delays in key structural reforms contributed to elevated inflation, impaired policy transmission, and a loss of credibility,” he explained.
He also highlighted deeper structural issues, including underinvestment in agriculture, persistent exchange rate misalignments, and the need to strengthen domestic financial markets. “These are outside the scope of today’s immediate rate decision, but they will shape the broader monetary policy landscape over the medium term,” he added.
Concluding his remarks, the governor called for a balanced approach to policy decisions to ensure that inflation control does not undermine economic recovery. “Our task over the next few days is to weigh these developments rigorously and reach a policy stance that reinforces the disinflation path without undermining the recovery or destabilizing market expectations,” he said.
Source: Ghana/Starrfm.com.gh/103.5FM/Deborah Amuzu
