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BANK OF GHANA
MONETARY POLICY COMMITTEE (MPC)
PRESS RELEASE
July 30, 2025

Good afternoon, ladies and gentlemen of the press.

Thank you for attending this press briefing, which follows the conclusion of the MPC’s
125th regular meetings, held from Monday, 28 July 2025, to evaluate recent economic
developments and risks to the inflation outlook. This briefing summarises the key
discussions and the Committee's decision on the monetary policy stance.

Since the last MPC meeting in May, the global economic outlook has become more
challenging with increased economic and trade policy uncertainties. The prolonged
bilateral tariff actions and retaliatory actions, amid rising geopolitical tensions, are
projected to constrain global growth. According to the IMF, global growth is likely to
slow to 3.0 percent in 2025 from 3.3 percent in 2024. Alongside the slower growth
prospects, the pace of disinflation has moderated, and in response, financial
conditions remain restrictive with potential spillover to emerging markets and
developing economies. However, the improved domestic macroeconomic conditions
are expected to moderate the risks from the global economy.

On the domestic front, the economy was buoyant in the first quarter of 2025, with an
annual GDP growth of 5.3 percent, compared to 4.9 percent in the same quarter of
2024, driven by increased activity in the agriculture and services sectors. Excluding
oil, the economy grew by 6.8 percent compared to 4.3 percent over the same
comparative period. Beyond the first quarter, the Bank’s high frequency real sector
indicators pointed to sustained pickup in economic activity. The Composite Index of
Economic Activity (CIEA) grew by 4.4 percent year-on-year, in May 2025 compared to
3.4 percent in the same period of 2024. International trade activities, consumption,
construction and tourist arrivals contributed to the improvement in economic activity
during the period. The latest business and consumer confidence surveys reflected
improved sentiments on the back of easing inflationary pressures and strong optimism
about economic conditions.

Since the last MPC meeting, headline inflation has declined further to 13.7 percent in
June 2025 from 18.4 percent in May, the lowest reading since December 2021. The
deceleration was underpinned by the tight monetary policy stance, fiscal consolidation,
easing food supply constraints, as well as the strong recovery of the cedi. In line with
the easing underlying inflation pressures, the Bank’s main core inflation measure,
which excludes energy and utility items, has declined markedly. Similarly, inflation
expectations by banks, consumers, and businesses are broadly anchored.

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Growth in monetary aggregates remained subdued during the first half of the year,
primarily due to the tight monetary policy stance, strong liquidity management, and
reduced government borrowing. In line with the disinflation process and easing
inflation expectations, interest rates at the short end of the money market have
declined sharply, and in turn, reduced the cost of government borrowing.

Data on budget execution indicated a strong commitment to fiscal consolidation as
expenditures adjusted within set targets to accommodate the revenue shortfalls during
the first half of 2025. As a result, the overall fiscal deficit on commitment basis was 0.7
percent of GDP, outperforming the budget target of 1.8 percent of GDP. The deficit
was largely financed from domestic sources. At end-June 2025, the total public debt
had declined to 43.8 percent of GDP from 61.8 percent of GDP at end-December
2024, due to the appreciation of the cedi, lower domestic borrowing, and the external
debt restructuring.

In the banking sector, the Financial Soundness Indicators reflected continued asset
growth, improved solvency, liquidity, profitability and efficiency in the first half of the
year. The non-performing loan ratio eased in June 2025 on account of lower growth
of non-performing loan stock relative to credit. Continued improvement in the
economic conditions, ongoing recapitalisation efforts from capital injections and
profits, coupled with the implementation of strict credit underwriting standards should
enhance resilience in the banking sector.

The external sector has improved markedly, with a record current account surplus of
US$3.4 billion in the first half of 2025, supported mainly by higher prices and increased
production volumes of gold and cocoa. The current account surplus, together with the
outturns in the capital and financial accounts, culminated in an overall balance of
payment surplus of US$2.2 billion, significantly higher than the US$588.5 million
recorded in June 2024. On this score, Gross International Reserves stood at US$11.1
billion at end-June 2025, equivalent to 4.8 months of import of goods and services,
compared to US$8.9 billion (4.0 months of import cover) as at end-December 2024.
The external sector outlook is positive, anchored on favourable commodity prices and
improved remittance inflows, despite the resumption of external debt service.

On the back of the strong external sector performance and increased reserve
accumulation, the cedi has further strengthened against the major trading currencies.
In the year to 25th July, 2025, the cedi appreciated by 40.7 percent against the US
dollar, 31.2 percent against the British pound, and 24.2 percent against the euro.

Overall, the Committee noted that macroeconomic conditions have significantly
improved, inflation expectations are broadly anchored, external buffers have
strengthened, and confidence in the economy is returning. The July forecast also
shows that headline inflation is expected to decline further in the third quarter of 2025
and trend within the medium-term target of 8±2 percent by the end of 2025, earlier
than initial projections. However, there are upside risks to the inflation outlook, which
include potential supply chain challenges emanating from the global trade tensions,
and upward adjustment in utility tariffs. This notwithstanding, the impact of these risks

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on inflation are expected to be offset by appropriately tight monetary policy stance and
continued fiscal consolidation.
Given these considerations, the Committee, by a majority decision, voted to lower the
Monetary Policy Rate by 300 basis points to 25.0 percent. Looking ahead, the
Committee will continue to assess incoming data and likely reduce the policy rate
further, should the disinflation trend continue. The Committee remains committed to
the price stability mandate, while creating conditions for inclusive and sustainable
growth.
END.

Informational Note
The next Monetary Policy Committee (MPC) meeting is scheduled for September 15,
2025. The meeting will conclude on September 17, 2025, with the announcement of
the policy decision.