Ghana's average inflation will more than double to 11.3 per cent in 2027, according to a new forecast by Fitch Solutions. This significant increase from an expected 4.7 per cent in 2026 will force the Bank of Ghana to raise its policy rate by 200 basis points.
The projected surge in inflation stems from several critical factors. Fitch Solutions points to fading support for the cedi, modest loosening of government spending, strong growth in the money supply, and rising imported food prices. These elements combine to challenge the idea that Ghana has achieved lasting price stability after its recent disinflation.
This outlook places Ghana's broader economic narrative at a crossroads. The country has worked hard to bring down inflation from record highs, with the Bank of Ghana maintaining its policy rate at 14 per cent. However, the forecast suggests that the current period of low inflation relies on conditions that may not last, such as currency stability, subdued food prices, and strict fiscal and monetary policies. The potential for renewed inflationary pressures could undermine efforts to stabilize the economy and attract investment.
Fitch Solutions expects inflation to exceed 10 per cent by the second quarter of 2027. "As inflation accelerates and breaches the 10% mark in Q2, we expect the BoG to begin tightening, raising the policy rate by a cumulative 200bps by year-end," the company stated. This would push the policy rate from its current 14 per cent to approximately 16 per cent by the end of 2027, representing a swift reversal from recent easing trends.
The implications for Ghana's economy are substantial. A return to monetary tightening means that businesses and households could face higher borrowing costs, interrupting the anticipated decline in lending rates. Commercial banks have already responded slowly to policy rate cuts due to factors like credit risk and the impact of Ghana's domestic debt restructuring. A further increase in the benchmark rate could keep financing conditions tight, hindering businesses' ability to rebuild balance sheets and expand production.
Another significant warning concerns the expansion of liquidity within the economy. Fitch Solutions highlighted that broad money-supply growth outpaced nominal gross domestic product (GDP) growth by 17.1 percentage points in the second quarter of 2026. When money in circulation grows faster than the value of goods and services produced, it can eventually lead to increased demand, currency pressure, or rising prices. While the effects are not always immediate, aggressive easing of interest rates while money supply is already expanding could weaken the foundations of recent disinflation efforts.
The exchange rate is also a central element of the forecast. Ghana's inflation performance has benefited from periods of cedi stability and appreciation, which reduced the cost of imported goods like food, fuel, and machinery. Fitch Solutions anticipates this support will weaken in 2027. The company's current-account projections show Ghana's external surplus narrowing from 7.9 per cent of GDP in 2026 to 5.3 per cent in 2027, a reduction of 2.6 percentage points. This narrowing surplus, combined with potential declines in key export earnings, could put pressure on the cedi.
The forecast includes a moderate decline in gold prices from about US$4,400 an ounce to US$4,200. Additionally, cocoa production could fall by 9.1 per cent due to weather disruptions linked to El Niño. Gold and cocoa are vital sources of foreign exchange for Ghana. A simultaneous weakening of export prices and production could reduce the supply of dollars, pressure the cedi, and revive imported inflation. While a 5.3 per cent of GDP current account surplus remains substantial, the direction of travel matters for currency stability and overall economic health. Decision-makers will closely monitor these trends to safeguard Ghana's economic gains.