Fitch Solutions forecasts the Bank of Ghana will keep its policy rate at 14% for the remainder of 2026. The UK-based research firm expects a cumulative 200 basis point increase to 16% in 2027. This tightening is anticipated as exchange rate support fades and inflationary pressures rebuild within the Ghanaian economy.
This projection suggests Ghana's rate-cutting cycle has effectively ended, despite current inflation remaining below the Bank of Ghana’s medium-term target. Fitch Solutions attributes Ghana's unusually low inflation, averaging 4.0% year-on-year, to delayed effects of earlier monetary tightening, favourable base effects, and the cedi's year-on-year strength. The Bank of Ghana maintained the policy rate at 14% in September for the third consecutive meeting, reflecting concerns over falling reserves and renewed foreign exchange pressure.
This forecast fits into Ghana's broader economic narrative of balancing inflation control with economic growth. The country has seen consumer price growth at multi-decade lows, significantly below the 2010-2025 average of 15.7% and the Bank of Ghana’s 6.0-10.0% target range. However, the direction of travel has changed, with inflation already rising from its March low of 3.2% to 5% in August. This shift requires the central bank to consider future price movements, not just current rates.
Fitch Solutions stated that inflation will reach 6.8% by the end of 2026, remaining below the Bank of Ghana’s 8% midpoint target. The firm noted, "Consumer price growth has remained at multi-decade lows this year, averaging just 4.0 per cent year-on-year." They also added, "As inflation accelerates and breaches the 10 per cent mark in quarter two 2027, we expect the BoG to begin tightening, raising the policy rate by a cumulative 200bps by year-end." This indicates a cautious approach by the central bank, aiming to preserve credibility and flexibility.
The implications for Ghana's economy are significant, particularly for businesses and consumers. The central bank faces a policy dilemma: cutting rates could boost credit and private sector activity but might weaken cedi-denominated assets. Raising rates immediately could support the currency but might seem premature. Holding the rate at 14% allows the Monetary Policy Committee to monitor economic indicators closely. The expected tightening in 2027 will likely impact borrowing costs and investment decisions.
Fitch Solutions projects average inflation to increase from 4.7% in 2026 to 11.3% in 2027. This acceleration is driven by weakening exchange rate support, modest fiscal loosening, and rapid money supply growth. Broad money supply growth exceeded nominal gross domestic product growth by 17.1 percentage points in the second quarter of 2026. Such rapid liquidity expansion can create excess demand, leading to inflation.
Furthermore, a strong El Niño event, expected to peak in late 2026, could raise global food prices. This would increase imported inflation in Ghana during 2027. The country's current account surplus is also projected to narrow from 7.9% of GDP in 2026 to 5.3% in 2027. This reduction is partly due to an anticipated decline in gold prices from US$4,400 to US$4,200 per ounce and a 9.1% fall in cocoa production. These factors collectively point to a challenging economic environment requiring careful monetary policy management.