The Bank of Ghana (BoG) has indicated that potential utility tariff hikes will play a key role in its next policy rate decision as the Monetary Policy Committee (MPC) evaluates risks to Ghana’s disinflation efforts.
Utility companies are seeking increases of more than 200% in water and electricity tariffs, sparking concerns that such adjustments could undermine recent progress in reducing inflation. Consumer inflation eased to 11.5% in August, falling below the government’s year-end target of 11.9%.
Speaking at the opening of the 126th MPC meeting on Monday, September 15, Governor Dr. Johnson Asiama highlighted signs of fiscal consolidation. He noted that Ghana’s budget deficit in the first half of 2025 was contained at 0.7% of GDP, below target, which, alongside a stronger cedi and external debt restructuring, helped lower the public debt ratio by mid-year.
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“On the back of easing inflation pressures, anchored expectations, and stronger buffers, the MPC reduced the policy rate by 300 basis points to 25.0% in July,” Dr. Asiama said. However, he cautioned that global trade risks and possible tariff hikes remain significant in determining the Bank’s next policy stance.
He reaffirmed the BoG’s commitment to price stability and sustainable growth, stressing: “We remain ready to adjust as the disinflation process evolves, while monitoring risks such as global trade disruptions and utility tariff adjustments.”
The MPC will conclude its deliberations on Wednesday, when the Bank of Ghana is expected to announce its latest policy rate decision.
Story By: Afia Ohenewaa Akyerem