Fitch Solutions Predict Halt in Monetary Policy Easing on Rebound of Inflation in H2 2026
Fitch Solutions says it expects the BoG to halt its easing cycle in H2 2026 as inflationary pressures re-emerge.
According to the research agency, despite inflation returning to the BoG’s 6.0–10.0% target range in Q4 2025 and Q1 2026, it will once again rise above the upper threshold in Q2 2026.
This, the agency noted, will reflect the unwinding of favourable base effects from the cedi’s appreciation in April-May 2025.
Furthermore, with Ghana’s Extended Credit Facility arrangement with the IMF ending in April 2026, it anticipates the country’s budget deficit to widen from a projected 3.7% of GDP in 2025 to 4.8% in 2026, which will have an inflationary impact.
“Against this backdrop, we expect the BoG to hold rates steady through H2 2026,” stated Fitch Solutions, adding that it expects the Bank of Ghana (BoG) will lower its benchmark interest rate to 23% by end-2025 and 20% by end-2026, following a steep 300-basis point cut to 25% in July 2025.
Fitch Solutions also forecasts average inflation to moderate from 22.9% in 2024 to 15.5% in 2025 and 12.2% in 2026, allowing the BoG to maintain a dovish stance at the final MPC meeting of 2025 and the first three meetings of 2026.
Meanwhile, Fitch Solutions expects that the BoG will cut the policy rate by 100bps to 24% at its next Monetary Policy Committee (MPC) meeting in September.
“Inflation has already eased to 13.7% y-o-y in June – the lowest level since 2021 – and we anticipate a further decline in the coming months, supported by a stronger exchange rate. Indeed, the cedi is approximately 40% stronger against the US dollar than a year ago, which will continue to curb imported price pressures, particularly given Ghana’s heavy reliance on imported goods such as rice, petrol, and vehicles.”
“Moreover, Brent crude prices are roughly 17% lower y-o-y, further reducing upside pressure on inflation. As a result, we forecast inflation to fall to around 10–12% in August (the final print before the September MPC meeting) providing the central bank with room to proceed with another rate cut,” it said.
