The Governor of the Bank of Ghana, Dr. Johnson Asiama, has hinted that the series of tariffs announced by the U.S. administration is evolving and may have negative effects on the global economy.
According to him, these developments have already triggered downgrades in GDP growth forecasts in the two largest economies—the U.S. and China—and in turn, global growth.
Speaking at the 123rd MPC press briefing in Accra on Friday, March 28, Dr. Asiama noted that the disinflation process appears to have stalled in some countries, while financial conditions remain broadly restrictive as central banks slow the pace of monetary policy easing.
He emphasized that the persistence of these “external headwinds may spill over to the domestic economy through the trade and financial channels, highlighting the need for policy to remain proactive.”
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On the domestic front, Dr. Asiama explained that early indications point to improved growth prospects.
“The Bank’s CIEA rebounded, and the Ghana Purchasing Managers’ Index moved above the 50-benchmark in February, implying increases in new orders by companies. Both business and consumer confidence have improved, and private sector credit growth is recovering.”
He said these developments suggest a positive outlook for the economy.
However, Dr. Asiama said while headline inflation has declined marginally, it remains a concern.
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Dr. Asiama cited recent developments as indicative of a positive outlook. However, he cautioned that despite a marginal decrease in headline inflation, it remains a concern that warrants attention.
He said both food and non-food inflation are significantly above expectation, and core inflation remains elevated.
“The persistent inflation dynamics over the past year, partly driven by both fiscal and monetary policy missteps, will require a policy reset to re-anchor the disinflation process. To restore price stability going forward will require a tight monetary policy stance, strong liquidity management, and commitment to the 2025 budget, which seeks to reset the fiscal consolidation process”.