back to top
27.8 C
Ghana

Deloitte: Disinflation Opens Door for Bank of Ghana to Cut Interest Rates

Published:

Global professional services firm Deloitte has said Ghana’s sustained disinflationary trend provides the Bank of Ghana (BoG) with ample room to begin cutting interest rates — potentially as early as the Monetary Policy Committee (MPC) meeting this July.

In its latest economic outlook report titled “West Africa Inflation”, Deloitte projected that Ghana could end 2025 with a single-digit inflation rate — falling below the BoG’s revised end-of-year target of 12%.

“Ghana is likely to end 2025 with an inflation rate in single digits,” Deloitte stated. “This gives the Bank of Ghana sufficient headroom to resume its interest rate cuts, which could start at its July MPC meeting.”

The move, Deloitte suggests, could stimulate greater lending to the real sector and support output expansion and overall economic recovery.

“A decline in interest rates will encourage more lending to the real sector and support further output and overall economic growth,” the firm emphasized.

The confidence from Deloitte comes on the back of recent inflation data released by the Ghana Statistical Service (GSS), which recorded a national inflation rate of 13.7% in June 2025 — marking a significant deceleration in price increases over the past several months.

Speaking at a press conference in Accra on July 2, Government Statistician Dr. Alhassan Iddrisu confirmed that inflationary pressures are easing, with the general price level from May to June falling by 1.2%, marking a rare case of monthly deflation.

“This downward inflationary trend over the last six months provides some consistency and assurance of a real, sustained shift in prices,” Dr. Iddrisu stated.

The fall in inflation is attributed mainly to a slowdown in the prices of food items and utilities, which had previously driven the inflationary surge.

However, the impact varies across regions. The Upper West Region recorded the highest inflation rate at 32.3%, largely driven by food and utility prices. In contrast, the Bono Region registered the lowest regional inflation at 8.4%, reflecting a more stable pricing environment.

Economists and analysts believe the BoG may now be under less pressure to maintain its tight monetary policy stance, which has kept the benchmark policy rate high in an effort to control inflation. The anticipated rate cuts, if realized, could offer much-needed relief for businesses and households dealing with high borrowing costs.

Related articles

Ghanaians chide Ablakwa over Presidential Jet hypocritical positions

A section of Ghanaians has taken to social media to criticise the Minister for Foreign Affairs, Samuel Okudzeto Ablakwa, over what they describe as...

Security recruitment expansion ‘not well thought-through’ – Nitiwul

Former Defence Minister Dominic Nitiwul has raised concerns over the timing of the government’s decision to significantly expand recruitment into Ghana’s security services, questioning...

Recent articles