Fitch Ratings has projected that the Bank of Ghana (BoG) is likely to maintain a cautious monetary policy stance and temporarily halt further interest rate cuts in order to keep inflation under control.

The UK-based ratings agency made the observation after upgrading Ghana’s sovereign credit rating to “B” with a stable outlook, reflecting growing confidence in the country’s economic recovery and fiscal management.

According to Fitch, the Bank of Ghana has already reduced the policy rate significantly by a cumulative 1,400 basis points between July 2025 and March 2026, bringing the benchmark rate down to 14%. However, the agency believes the central bank may now pause the easing cycle to avoid renewed inflationary pressures.

Fitch noted that inflation dropped sharply to 3.2% year-on-year in March 2026, the lowest level recorded since 1999, largely due to the appreciation of the Ghana cedi which helped reduce import costs. Inflation, however, edged slightly higher to 3.4% in April 2026.

The ratings agency expects inflation to gradually rise again later in the year as the impact of the cedi’s appreciation weakens and higher global oil prices begin to affect domestic prices.

Despite this expected increase, Fitch maintained that average inflation will continue on a downward trend over the next two years.

“Inflation will gradually rise by the end of the year as the pass-through effect fades and higher oil prices impact domestic prices. However, on an annual average basis, inflation will remain on a declining trend in 2026 and 2027,” the agency stated.

On economic growth, Fitch projected that Ghana’s real Gross Domestic Product (GDP) growth will remain strong through 2027 and average about 5%.

The agency attributed the expected growth to strong prospects in the gold mining sector, improved consumer confidence due to lower inflation and borrowing costs, as well as a less restrictive fiscal policy environment.

Fitch also assessed Ghana’s governance standards positively under its Environmental, Social and Governance (ESG) framework.

According to the agency, Ghana ranks at the 51st percentile on the World Bank Governance Indicators (WBGI), supported by peaceful political transitions, moderate institutional strength, adherence to the rule of law and moderate levels of corruption.

However, Fitch warned that some risks could negatively affect Ghana’s credit rating in the future if not properly managed.

Among the major concerns highlighted were weaker fiscal performance, increased government spending, failure to sustain public financial management reforms and rising debt servicing costs driven by higher inflation.

The agency also warned that Ghana’s external financial position could come under pressure if the country fails to continue building its foreign exchange reserves, especially in the face of unfavourable global trade conditions.

Fitch’s latest assessment is expected to boost investor confidence in Ghana’s economy, while also reinforcing expectations that the Bank of Ghana will remain careful in balancing economic growth with inflation control.