The Monetary Policy Committee (MPC) of the Bank of Ghana has maintained the policy rate at 27 per cent, citing an elevated inflation profile largely driven by food price movements.

The Committee said this also extended to the time horizon of achieving the medium-term target of 8±2 percent.

Dr Ernest Addison, the Governor of the Bank of Ghana, speaking at 122nd MPCs press briefing, said the Committee noted that global economic conditions broadly improved in 2024.

He said global inflationary pressures had gradually eased over the period, which had led to easing monetary policy stance across several countries.

Consequently, global financial conditions are expected to ease gradually, as policy stances become more accommodative and inflation targets in Advanced Economies are met and expectations anchored.

He said these conditions were expected to result in improvements in investor sentiments towards emerging markets and developing economies.

“On top of the projected steady growth for 2025, the international markets have priced in a much stronger US economy stemming from the policies to be implemented by the new US administration,” he added.

The Governor said this had already instigated a stronger US dollar with implications for emerging markets and developing economies, including Ghana.

He said complementary fiscal and monetary policies would therefore have to be carefully set to prevent spillovers to the Ghanaian economy.

Dr Addison said external sector conditions remained positive, with sustained and stronger-than-programmed rebuilding of reserve buffers contributing to the stability of the domestic currency.

He said the performance of the external sector was mainly driven by strong growth in gold exports, which also largely impacted positively on growth.

In the outlook, the external sector is expected to remain strong as commodity prices remain favourable amid improvements in production.

Overall, while the external sector conditions are expected to provide an anchor to exchange rate stability, key risks in the outlook, including challenges in the energy sector, will have to be closely monitored.

The Governor said the stronger-than-projected growth and generally improved macroeconomic conditions were spilling over positively to the banking sector.

He said to sustain this effort, the Bank of Ghana would continue to ensure that banks with capital gaps adhered to their committed recapitalisation plans to shore up solvency.

“Supervisory activities will be intensified to ensure that banks continue to address the high NPLs, which poses potential risks to the stability of the industry,” he added.

He said the improvement in domestic macroeconomic conditions was also expected to bolster debt servicing capabilities of corporate and household sectors, which would help mitigate further build-up of NPLs within the industry.

Dr Addison said the inflation profile remained elevated, largely driven by food price movements, especially in the last quarter of the year.

The climate-related factors including the dry spells in some parts of the food-growing regions of the country and the late onset of rains, negatively affected production, while supply chain weaknesses generally affected food prices.

The Governor said while the inflation outturn for the year 2024 deviated from target, it was expected that the disinflation process would resume, contingent on renewed efforts at fiscal consolidation, which is anticipated in the new administration’s economic policy agenda and the yet-to-be-presented 2025 budget statement.