Disinflation Era Over; But Economy Still Robust …Says Dr Asiamah

The Governor of the Bank of Ghana (BoG), Dr. Johnson Pandit Asiama, has declared that Ghana’s prolonged period of falling inflation has come to an end, indicating that price increases are gradually returning to the Central Bank’s target range.

Opening the 131st Monetary Policy Committee (MPC) meeting in Accra on Monday, Dr. Asiama said while inflation has risen for three consecutive months, current levels remain well below the Bank’s target range and are not yet a cause for alarm.

“The prolonged disinflation phase has ended and inflation is now returning towards the target band,” he stated, adding that the key question before the Committee is whether the latest increase represents a normal adjustment or the beginning of a more persistent inflationary trend.

According to the Governor, headline inflation increased from 3.2 percent in March to 5.3 percent in June, driven mainly by higher transport and haulage costs. Despite the increase, inflation remains below the Bank’s medium-term target band of 8 percent, plus or minus two percentage points, and significantly lower than the 13.7 percent recorded during the same period last year.

Dr. Asiama noted that Ghana’s economy has remained resilient despite growing uncertainties in the global economy. He disclosed that the economy expanded by 6.4 percent in the first quarter of 2026, compared to 6.2 percent in the corresponding period last year, while real private sector credit growth surged to 34.1 percent, reversing a 4.5 percent contraction recorded a year earlier.

The Governor also observed that the cedi has remained broadly stable through the first half of July, while the banking sector continues to be well-capitalised despite relatively high non-performing loans.

On the global front, Dr.Asiama warned that renewed tensions around the Strait of Hormuz have pushed Brent crude oil prices above US$85 per barrel, slowing the pace of global disinflation and creating fresh uncertainty for central banks worldwide.

He explained that as a commodity-exporting but energy-importing country, Ghana must carefully assess how rising international energy prices could affect the domestic inflation outlook in the months ahead.

The Governor outlined four major issues that will dominate deliberations at the MPC meeting. These include assessing whether the recent rise in inflation is temporary or more entrenched, evaluating the effectiveness of the Bank’s monetary policy reforms introduced in May, examining the impact of ending the Bank’s pre-financing of GoldBod purchases on domestic liquidity and considering the implications of renewed volatility in global oil markets for Ghana’s exchange rate and foreign reserves.

Dr. Asiama stressed that the Committee’s responsibility extends beyond reviewing the latest economic data.

“Our task this week is not simply to assess the latest data. It is to determine whether the framework we strengthened in May remains fit for the conditions now before us, and whether the choices we made then continue to serve the medium-term objectives on which our credibility depends,” he said.

He also announced the launch of the Monetary Policy Committee Educational Observership Programme (MPC-EOP), under which selected students from the University of Ghana are participating in aspects of this week’s MPC proceedings to enhance public understanding of monetary policy and strengthen engagement between academia and the central bank.

 

 

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