Vish Ashiagbor, Country Senior Partner at PwC Ghana, has called for cautious optimism as the Bank of Ghana’s Monetary Policy Committee (MPC) prepares to announce its latest policy rate decision this week, warning that external risks could complicate efforts to reduce borrowing costs despite improving economic conditions.
Speaking on the sidelines of the PwC 2026 Post-Budget Forum, Mr. Ashiagbor acknowledged that Ghana’s sharp decline in inflation creates room for further rate cuts but emphasized the need for careful consideration of emerging vulnerabilities. He suggested the central bank might opt to maintain the current 21.5 percent rate rather than cut it further.
The MPC began its 127th meeting on Monday, November 24, 2025, and is expected to conclude deliberations on Wednesday, November 26. The gathering comes at a pivotal moment, with Ghana’s inflation falling dramatically to 8.0 percent in October from 9.4 percent in September, marking the lowest rate in four years and the tenth consecutive monthly decline.
Mr. Ashiagbor noted that inflation now sits comfortably within the Bank of Ghana’s (BoG) target band of 8 percent plus or minus 2 percentage points, creating favorable conditions for monetary easing. However, he cautioned that the central bank must balance this progress against lingering external threats to Ghana’s economic trajectory.
PwC flagged concerns raised by Fitch Solutions about rising Islamist insurgency in the Sahel region, which could threaten Ghana’s growth prospects despite an otherwise robust economic outlook. The firm advised the BoG to weigh these geopolitical risks carefully before making its decision.
Governor Johnson Asiama signaled during his opening remarks on Monday that the Committee is considering another rate reduction, citing sharply rising real interest rates as a key challenge. He stated that while Ghana’s economic fundamentals are the strongest in years, falling inflation has pushed real borrowing costs to elevated levels that could constrain the ongoing recovery.
The central bank has already implemented two significant rate cuts this year. In September, the MPC reduced the policy rate by 350 basis points to 21.5 percent from 25 percent, following an earlier 300 basis point cut in July that lowered the rate from 28 percent to 25 percent. Both reductions were driven by sustained disinflation and improved macroeconomic conditions.
Ghana’s economic performance has strengthened considerably, with real Gross Domestic Product (GDP) including oil expanding by 6.3 percent in the second quarter of 2025, up from 5.1 percent in 2024. Non-oil GDP grew even faster at 7.8 percent, compared with 5.7 percent the previous year, driven by improved activity in services, construction, and agriculture.
The cedi has remained broadly stable throughout 2025, supported by improved confidence and foreign exchange reforms. Ghana’s gross international reserves have climbed to $11.41 billion, equivalent to 4.8 months of import cover, representing the highest level in years. The BoG projects reserves will reach five months of coverage by year end.
Governor Asiama indicated that Ghana may be entering a sustained period of price stability, with inflation expected to settle between 4 and 6 percent by year end and remain within the target band through 2026. He noted that money supply growth has moderated and credit conditions are beginning to ease, strengthening the case for policy adjustment.
However, the Governor emphasized that any rate decision must be made carefully to preserve the central bank’s credibility. He explained that as inflation declines faster than projected, real interest rates have risen sharply, creating a delicate balancing act for policymakers who must support economic recovery while safeguarding stability.
High frequency indicators point to stronger economic activity and improved sentiment among households and businesses. The Purchasing Managers’ Index has remained above the benchmark level of 50, signaling expansion, while consumer and business confidence surveys have shown robust and positive trends.
Mr. Ashiagbor previously described Ghana’s return to 8 percent inflation as clear evidence that the country’s macroeconomic framework is strengthening. He has consistently emphasized that maintaining fiscal discipline and building private sector confidence will be critical to consolidating recent gains and sustaining price stability.
The policy rate serves as the benchmark for lending and directly influences the cost of credit for businesses and households. Analysts and business leaders are closely watching this week’s decision for signals about the central bank’s approach to balancing economic growth with inflation control in the months ahead.
