Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, says that most central banks have paused their monetary policy rate cuts.
At the 131st Monetary Policy Committee (MPC) press conference in Accra on Wednesday, July 23, Dr Asiama explained that on the global front, the easing of geopolitical tensions around mid-June proved short-lived.
He said the renewed escalation of the conflict has led to another closure of the Strait of Hormuz, and triggered instability in energy markets.
Notwithstanding these developments, he added, global economic activity has remained resilient, supported by substantial investments related to artificial intelligence, particularly in the United States and China, as well as the drawdown of crude oil inventories to ease supply pressures arising from the conflict.
Consequently, the International Monetary Fund (IMF) projected global growth at 3 percent in July 2026, broadly unchanged from the April 2026 forecast of 3.1 percent.
A further escalation of the conflict could, however, weaken the near-term growth outlook. Crude oil prices have rebounded above US$85 per barrel following the renewed conflict.
Together with supply chain disruptions, this is expected to further slow the pace of disinflation across several countries, he said.
“In response, most central banks have paused their monetary policy rate cuts,” Dr Asiama stressed.
He further stated that global financing conditions remain broadly accommodative in both Advanced and Emerging Market Economies.
However, with heightened uncertainty and emerging inflationary pressures, financing conditions could tighten in the near-term, with adverse implications for Emerging Developing Economies, including Ghana.
“Domestically, economic activity remained resilient in the first quarter of 2026. Real GDP growth was 6.4 percent, driven by the services and industry sectors, compared with 6.2 percent growth recorded in the same quarter of 2025.
The Bank’s Composite Index of Economic Activity (CIEA), which tracks high-frequency real sector indicators, pointed to a sustained increase in economic activity. The CIEA recorded annual growth of 13.4 percent in May 2026 compared with 4.4 percent in May 2025. Credit to the private sector, international trade activities, industrial production, and tourist arrivals, all contributed to the improved economic performance during the period.
“The latest confidence surveys, conducted in June 2026 showed positive consumer and business sentiments, supported by optimism about growth prospects, subdued inflation, and declining lending rates.”
On the Policy rate, he announced that the MPC, by unanimous decision, maintained the Monetary Policy Rate at 14 per cent.
“The Committee judged that the current policy stance remains appropriate to guide inflation into the medium-term target band, while allowing time to assess the evolving geopolitical developments and their potential impact on the domestic economy.”
