Fitch Ratings expects the Bank of Ghana (BoG) to maintain its current interest rate policy to control inflation. This decision follows a cumulative reduction of 1,400 basis points in the policy rate between July 2025 and March 2026, which set the benchmark rate at 14%.
The ratings agency anticipates inflation will gradually increase in the coming months. This rise will happen as the positive effects of the Ghana Cedi's appreciation lessen. Higher global oil prices are also expected to translate into increased domestic prices, pushing inflation upwards.
This expectation is part of Ghana's broader economic narrative, where inflation has seen significant fluctuations. Inflation previously slowed to 3.2% year-on-year in March 2026, marking its lowest point since 1999. It then slightly increased to 3.4% in April 2026. Despite the expected short-term rise, Fitch projects that average inflation will trend downwards in both 2026 and 2027. Ghana's real Gross Domestic Product (GDP) growth is also forecast to remain robust, averaging about 5% through 2027.
Fitch made these comments in its recent assessment, which upgraded Ghana's credit rating to B with a stable outlook. "Inflation slowed to 3.2% year-on-year in March 2026, its lowest level since 1999, supported by the appreciation of the exchange rate. It edged up slightly to 3.4% in April 2026, and we expect it to rise gradually towards the end of the year as exchange rate effects fade and higher oil prices feed into local prices," Fitch stated.
Decision-makers at the Bank of Ghana will likely continue to monitor inflation data and global commodity prices closely. Markets will watch for any shifts in monetary policy that could impact borrowing costs and investor confidence. A sustained pause in rate cuts could further stabilize the GHS and encourage long-term investment, supporting the projected GDP growth of about 5%.
Ghana's projected GDP growth will benefit from increased gold production and better consumer confidence. Lower inflation and reduced borrowing costs also contribute to this positive outlook. A less restrictive government spending policy will further support economic expansion. The country also maintains a moderate score on the World Bank Governance Indicators, ranking at the 51st percentile. This reflects Ghana's history of peaceful political transitions and stable institutions.
However, Fitch also highlighted potential risks that could lead to a downgrade of Ghana's rating. Weaker government finances, such as lower-than-expected budget surpluses, could arise from higher spending. Failure to continue public financial management reforms could also negatively affect the rating. Rising debt servicing costs, especially if inflation exceeds expectations, could pressure government finances. On external finances, Ghana risks a downgrade if it fails to build its foreign currency reserves. This is particularly crucial if global trade conditions worsen or commodity prices experience shocks.