Ghana’s central bank has trimmed its key interest rate for the third time in a row, signalling growing confidence in the country’s sharp economic turnaround and a sustained slide in consumer prices.
The Monetary Policy Committee of the Bank of Ghana voted overwhelmingly to reduce the benchmark rate by 350 basis points to 18 percent. Announcing the decision in Accra on Wednesday, Governor Johnson Asiama said the easing reflects firmer real interest rate conditions and stronger expectations that inflation will stay within target over the coming months.
He explained that the current rate environment has supported the bank’s efforts to ease price pressures while creating room to stimulate economic growth. “The prevailing high real interest rates provided some scope to ease monetary policy to further boost the growth recovery efforts,” he said, adding that inflation is projected to remain stable into the first half of 2026.
A rapid turnaround in inflation
Ghana has staged one of the continent’s most striking disinflation stories. Inflation, which surged above 54 percent in late 2022, its highest level in more than twenty years — returned to the bank’s target band of six to ten percent by September this year. The moderation continued in October, when the rate slowed further to 8 percent, the lowest level recorded in more than four years.
A combination of improved fiscal discipline and a strong performance in gold exports has aided the reversal. With global bullion prices soaring, Ghana, Africa’s biggest gold producer, has enjoyed a lift in export earnings. The cedi has gained about 30 percent against the US dollar this year, reducing the cost of imported goods and helping tame inflation pressures more broadly.
Finance Minister Cassiel Ato Forson, presenting the national budget recently, reiterated the government’s aim of completing its International Monetary Fund programme and maintaining discipline in public spending. He projected a primary surplus of 1.5 percent of GDP by 2026, alongside a narrower fiscal deficit of 2.2 percent that same year. Growth is expected to strengthen to at least 4.8 percent in 2026, from an estimated 4 percent in 2025.
Fresh data from the Ghana Statistical Service show that consumer prices have now slowed for ten consecutive months. Food inflation fell to 9.5 percent in October from 11.8 percent in September, helped by the harvest season and favourable comparisons with last year’s sharply higher prices.
The central bank believes the economy is on a firmer path, though it remains alert to global risks and the need to preserve recent gains. For policymakers in Accra, the latest interest rate cut may be another sign that Ghana’s bruising inflation shock is firmly in retreat.
