The Governor of the Bank of Ghana Dr. Johnson Asiama has warned that escalating tensions in the Middle East could threaten Ghana’s improving inflation outlook.

Speaking at the opening of the 129th Monetary Policy Committee (MPC) meeting, the Governor noted that the evolving geopolitical situation could have significant implications for Ghana’s economic stability.

According to him, the conflict is already disrupting major global energy and shipping routes.

“A significant external development has entered the picture, and that has to do with the escalation of the conflict in the Middle East. This conflict is disrupting key energy and shipping corridors,” he stated.

The Governor explained that the situation is also increasing volatility in global oil markets and creating uncertainty around global inflation.

“It is increasing volatility in global oil markets, and it is introducing new uncertainty into the trajectory of global inflation,” he said.

Dr. Asiama warned that the development could translate into higher costs for Ghana through imported inflation.

“For Ghana, the transmission channels are clear. Sustained oil price increases could raise the risk of imported inflation and could also tighten global financial conditions.”

Despite these risks, he indicated that rising geopolitical tensions could support gold prices, which may benefit Ghana’s trade balance.

“Geopolitical uncertainty tends to support gold prices… This could benefit our trade balance,” he added.

Dr. Asiama noted that these external developments will form part of the considerations by the Monetary Policy Committee as it deliberates on the appropriate policy stance, including whether to adjust the policy rate.

He stressed that although Ghana’s macroeconomic indicators have improved significantly, the committee must carefully weigh global risks before making any decision.

According to him, the MPC’s decision on the policy rate will therefore reflect both the progress made in stabilising the economy and the emerging uncertainties in the global environment.