Fitch Solutions expects the Bank of Ghana (BoG) to keep its policy rate at 14% for the rest of 2026 before raising it by a cumulative 200 basis points to 16% in 2027 as inflationary pressures begin to build.
The UK-based research firm expects the Monetary Policy Committee to maintain the rate at its final meeting of the year in November, citing Ghana’s relatively low inflation and continued support from the cedi.
Fitch Solutions, however, believes there is little room for further rate cuts as inflation has started rising from its March low and could accelerate more sharply next year.
“Consumer price growth has remained at multi-decade lows this year, averaging just 4.0 per cent year-on-year, well below the 2010-2025 average of 15.7 per cent and the BoG’s 6.0-10.0 per cent target range,” the firm said.
It attributed the low inflation environment to the delayed effects of previous monetary tightening, favourable base effects and the cedi’s year-on-year strength.
The BoG kept the policy rate at 14% in September for the third consecutive meeting, after earlier cuts brought the rate down significantly.
Fitch Solutions projects inflation to rise to 6.8% by the end of 2026, from 5% in August and 3.2% in March. Despite the increase, inflation is expected to remain below the 8% midpoint of the BoG’s target range through the final quarter of the year.
The firm therefore expects the central bank to hold the policy rate at 14% in November, although it sees little appetite for another cut.
According to Fitch Solutions, rising energy costs and weakening exchange-rate support could put additional pressure on prices. The cedi has also begun to weaken on a year-on-year basis, potentially increasing the cost of fuel, transport and imported goods.
The bigger concern, however, is 2027, when Fitch Solutions expects inflation to rise sharply.
The firm forecasts average inflation will increase from 4.7% in 2026 to 11.3% in 2027, with inflation expected to exceed 10% in the second quarter of next year.
“As inflation accelerates and breaches the 10 per cent mark in quarter two 2027, we expect the BoG to begin tightening, raising the policy rate by a cumulative 200bps by year-end,” it said.
Fitch Solutions identified weakening exchange-rate support, modest fiscal loosening and rapid growth in money supply as key factors behind its outlook.
Broad money supply growth was already 17.1 percentage points higher than nominal GDP growth in the second quarter of 2026, according to the firm. It warned that sustained growth in liquidity could eventually increase demand for goods, assets and foreign currency, creating additional inflationary pressure.
The firm also expects a strong El Niño event to push up global food prices and increase imported inflation in 2027.
Ghana’s current-account surplus is projected to narrow from 7.9% of GDP in 2026 to 5.3% in 2027. Fitch Solutions expects the decline to be partly driven by lower gold prices and a 9.1% fall in cocoa production due to weather-related disruptions.
A smaller external surplus could weaken one of the key factors supporting the cedi and helping to contain imported inflation.
Fitch Solutions also considers the BoG’s goal of building reserves equivalent to 15 months of import cover by 2028 to be highly ambitious and unlikely to be achieved.
It said the central bank could therefore continue to rely on positive real interest rates to attract portfolio inflows and strengthen its foreign-exchange reserves.
The firm warned that a prolonged or more severe escalation of tensions in the Middle East could push international energy prices higher and keep domestic fuel costs elevated. In such a scenario, the BoG could begin raising rates as early as November 2026 or increase rates by more than the 200 basis points currently projected for 2027.
For households and businesses, the forecast suggests that the current period of relatively low inflation may not lead to a prolonged decline in borrowing costs.
While the BoG may keep the policy rate at 14% in November, Fitch Solutions’ outlook suggests that the era of monetary easing is nearing its end, with renewed inflationary and exchange-rate pressures likely to shape monetary policy in 2027.
