The Monetary Policy Committee (MPC) of the Bank of Ghana has maintained the policy rate at 27%, despite Ghana missing its 2024 end-year inflation target of 15%. Inflation surged to 23.8% in December 2024, marking the highest level in eight months.
Governor Dr. Ernest Addison announced the decision during the first MPC press briefing for 2025, held at the Bank of Ghana’s new headquarters at Bank Square. He attributed the persistent inflation to food price increases, exacerbated by climate challenges and supply chain disruptions.
“The inflation profile remains elevated, largely driven by food price movement, especially in the last quarter of the year. Climate factors, including dry spells in some food-growing areas and the late onset of rains, negatively affected production,” Dr. Addison explained.
Supply chain challenges further worsened food prices, deviating inflation from the Bank’s medium-term target of 8% ± 2%.
However, Dr. Addison expressed optimism about a gradual resumption of the disinflation process. This, he said, hinges on fiscal consolidation measures expected under the new administration’s economic policies and the yet-to-be-presented 2025 budget.
“While the inflation outturn for 2024 deviated from the target, it is expected that the disinflation process will resume, contingent on renewed efforts at fiscal consolidation, which we anticipate in the new administration’s economic policy agenda and the 2025 budget statement,” he said.
Despite inflationary pressures, the Bank of Ghana’s latest forecast projects a gradual return to disinflation, albeit over an extended timeline.
“The Bank’s latest inflation focus shows a steady decline and a return to the path of disinflation, though achieving the medium-term target will take longer than anticipated,” Dr. Addison noted.
