Ghana's economic landscape is experiencing a period of low inflation, averaging 4.0% year-on-year in 2026, significantly below the historical norm of 15.7% recorded between 2010 and 2025. Despite this, Fitch Solutions has maintained its forecast that the Bank of Ghana's (BoG) policy rate will remain at 14.00% through the end of 2026. This projection is attributed to the lagged effects of the central bank's earlier monetary tightening, favourable base effects from the prior year's price comparisons, and a stronger cedi relative to a year ago.
The Bank of Ghana's Monetary Policy Committee (MPC) recently decided to hold its benchmark rate unchanged at 14%, citing a resilient economy. This decision was made during two consecutive meetings in late September and early October. According to Fitch Solutions, the MPC was reportedly unanimous in its decision, despite concerns over an approaching El Niño weather pattern. The committee's move reflects its cautious approach to monetary policy, balancing the need to control inflation with the goal of supporting economic growth.
Fitch Solutions attributes the unusually subdued inflation to several factors, including the lagged effects of the central bank's earlier monetary tightening, favourable base effects from the prior year's price comparisons, and a stronger cedi relative to a year ago. However, the firm notes that inflation has already begun climbing off its lows, rising from 3.2% in March to 5.0% by August. This upward trend is expected to continue, with Fitch projecting inflation could reach 6.8% by the end of the year.
Despite the encouraging inflation numbers, Fitch Solutions flags potential risks that could drive prices higher. These include elevated energy costs tied to the ongoing US-Iran conflict and a cedi that has started to weaken on a year-on-year basis. The firm expects these factors to contribute to an uptick in inflation, potentially building pressure on the BoG to adjust its policy rate.
For ordinary Ghanaians, a steady policy rate at 14% through the rest of 2026 generally means little immediate change in commercial bank lending rates, which have been gradually easing alongside falling inflation. However, a hike to 16% in 2027, if it materialises as Fitch predicts, could reverse some of that relief, pushing up the cost of borrowing for businesses and individuals with loans tied to the policy rate.
The policy rate is the interest rate at which the Bank of Ghana lends to commercial banks, and it serves as a benchmark that influences the interest rates banks charge customers on loans and offer on deposits. The MPC, made up of BoG officials and external members, meets periodically throughout the year to review economic conditions and decide whether to raise, lower, or hold the rate. The committee's next meeting is scheduled for November, which will determine whether the central bank sticks with its current 14% rate or makes an earlier-than-expected move.
The forecast by Fitch Solutions has implications for borrowers and savers in Ghana. A steady policy rate at 14% in 2026 means that borrowing costs will remain relatively stable, while a potential hike to 16% in 2027 could lead to increased costs for borrowers. On the other hand, savers and holders of government securities may benefit from higher returns if the policy rate is increased.
Key points
- Fitch Solutions expects the Bank of Ghana to keep its policy rate at 14% in 2026 before raising it to 16% in 2027.
- Ghana's inflation has averaged 4.0% year-on-year in 2026, significantly below the historical norm of 15.7%.
- The Bank of Ghana's Monetary Policy Committee is scheduled to hold its final meeting of 2026 in November.
