MPC maintains policy rate at 14% for third consecutive meeting amid inflation risks

The Bank of Ghana’s Monetary Policy Committee (MPC) has kept the policy rate at 14% for the third consecutive meeting, citing a balanced outlook for inflation and economic growth. This unanimous decision was made despite global inflationary pressures, higher crude oil prices, geopolitical tensions, and supply chain disruptions.

Bank Governor Dr Johnson Asiama highlighted the resilience of the domestic economy and the moderation in underlying inflationary pressures as factors influencing the decision. The policy rate remained at 14.0 percent, as headline inflation rose to 5% in August 2026 from 4.6% in July. The increase was mainly due to non-food inflation, which reached 6.8% from 6.1%, largely because of utility tariff adjustments and rising crude oil prices.

Despite the rise, broad inflation expectations and core inflation measures declined, suggesting a moderation in the underlying inflation. The core inflation measure, excluding energy and utility prices, eased to 4.2% in August from 4.3% in July. The Governor warned of several upside risks to the inflation outlook, including further utility tariff hikes, increasing petroleum prices affecting transport fares, a stronger US dollar, and potential global supply chain disruptions.

Conversely, continued fiscal consolidation, improved food supply conditions, and exchange rate stability offered offsetting downside risks. Economic activity remained robust during the first half of 2026, with the real GDP growth at 6% in the second quarter, driven by the services and industry sectors. Private-sector credit growth surged to 35.5% in August, and the average lending rate decreased to 15.9% from 24.2% a year earlier, indicating eased financing conditions.

However, the Bank cautioned that global developments, specifically elevated crude oil prices, geopolitical tensions, and tighter global financial conditions, could pose risks to Ghana’s economic outlook.