BoG Flags Energy Price Shocks as Key Threat to Inflation Outlook
Rising global energy prices triggered by escalating tensions in the Middle East could pose significant upside risks to Ghana’s inflation outlook, Governor of the Bank of Ghana, Dr Johnson Asiama, has cautioned.
Responding to a question at the 129th Monetary Policy Committee (MPC) press briefing, Dr Asiama noted that the extent of the impact on headline inflation will largely depend on the persistence of the geopolitical crisis involving the United States, Israel and Iran.
“It all depends on whether the problem in the Middle East becomes persistent. Because we are net importers of petroleum products, certainly if global oil prices surge, that will impact domestic prices in Ghana, and as you are aware, it feeds into inflation,” he stated.
According to him, while the risk of imported inflation remains real, the authorities have policy options to mitigate potential shocks.
“This is not the first time. There is a set of measures that the government can implement to cushion the effect… we are monitoring what other countries are doing and will respond if the situation persists,” he added.
Dr Asiama further indicated that Ghana’s improved external buffers provide some level of protection against external shocks, noting that gross international reserves currently stand at close to six months of import cover.
“The good thing is we have accumulated enough reserves… that should allow us to protect the gains going forward. But we are monitoring the situation and the MPC is ready to act if needed,” he said.
The caution comes despite continued disinflation in the domestic economy, with headline inflation declining sharply to 3.3% in February 2026 from 5.4% in December 2025.
The decline, according to the Central Bank, has been driven by easing food and non-food inflation, alongside subdued underlying price pressures as reflected in core inflation.
Inflation expectations across consumers, businesses and the financial sector also remained broadly anchored during the period.
The sustained disinflation over the past 14 months has been supported by a relatively tight monetary policy stance, appreciation of the cedi, and improved food supply conditions.
However, the Central Bank maintains that external shocks, particularly from energy markets, remain a key risk that could disrupt the current downward inflation trajectory.
