Fitch Ratings has cautioned that the Bank of Ghana (BoG) may be forced to pause its monetary policy easing cycle to prevent inflationary pressures from resurfacing.

The warning follows the central bank’s aggressive rate cuts — a cumulative 1,400 basis points between July 2025 and March 2026 — which lowered the policy rate to 14%.

Fitch noted that while inflation has fallen sharply in recent months, underlying risks remain.

The agency expects price pressures to gradually rise later in 2026 as the benefits of exchange rate appreciation fade and elevated oil prices feed into domestic costs.

President Mahama announces GH¢3 billion revolving housing fund “Inflation slowed to 3.2% year-on-year in March 2026, its lowest level since 1999, before edging up to 3.4% in April. We expect inflation to gradually rise by year-end as the pass-through abates and high oil prices affect domestic prices,” Fitch stated.

The ratings agency maintained that Ghana’s economic growth outlook remains favourable, projecting real GDP growth to average 5% through 2027.

It attributed the expected growth to positive developments in the gold mining industry, improving consumer confidence due to lower inflation and reduced borrowing costs, as well as a more relaxed fiscal policy environment.

Fitch further noted that Ghana ranks at the 51st percentile on the World Bank Governance Indicators, describing the country as having relatively stable democratic structures and moderate institutional strength.

The agency also said the ranking reflects Ghana’s history of peaceful political transitions, moderate political participation, adherence to the rule of law and manageable corruption levels.

However, Fitch also outlined a number of risks that could result in a downgrade of Ghana’s credit rating.

According to the agency, weaker fiscal performance, including lower-than-expected primary budget surpluses caused by excessive spending or failure to sustain public financial management reforms, could negatively affect the country’s ratings outlook.

It further warned that higher inflation could push up debt servicing costs and worsen the interest-to-revenue ratio.

SO/SA

Africa no longer on the sidelines of global finance - BoG Governor