Fitch Solutions has projected a sharp increase in Ghana’s inflation rate in 2027, forecasting the annual average to rise from 4.7 percent in 2026 to 11.3 percent next year as exchange-rate support fades and monetary and fiscal pressures build.
The UK-based research firm said the expected acceleration would be driven by a combination of weaker exchange-rate support, modest fiscal loosening and strong growth in money supply.
It noted that broad money supply growth had already exceeded nominal Gross Domestic Product (GDP) growth by 17.1 percentage points in the second quarter of 2026, pointing to potential inflationary pressures ahead.
Fitch Solutions also identified weather-related pressures as a key risk to Ghana’s inflation outlook. It said a strong El Niño event, expected to peak towards the end of 2026, had already started pushing up global food prices and could increase imported inflationary pressures in Ghana in 2027.
“As inflation accelerates and breaches the 10 percent mark in Q2 [second quarter] 2027, we expect the BoG to begin tightening, raising the policy rate by a cumulative 200bps [basis points] by year-end,” the firm said.
BoG could tighten earlier
The research firm, however, warned that the Bank of Ghana (BoG) could be forced to tighten monetary policy earlier than currently anticipated if external pressures intensify.
It said a further escalation or prolonged conflict in the Middle East could push global energy prices higher, keeping fuel prices elevated in Ghana and adding to domestic inflation.
Such developments, Fitch Solutions said, could prompt the BoG to begin raising its policy rate as early as November 2026, or increase rates by more than the 200 basis points currently forecast for 2027.
The projected inflation increase would mark a significant reversal from the disinflation trend recorded in 2026, with the exchange rate expected to provide less support to domestic price stability.
Current account surplus to narrow
Fitch Solutions also expects Ghana’s current account surplus to weaken, projecting a decline from 7.9 percent of GDP in 2026 to 5.3 percent in 2027.
The narrowing surplus is expected to reflect a combination of lower gold prices and weaker cocoa production.
The firm forecasts gold prices to decline modestly from about US$4,400 per ounce in 2026 to US$4,200 per ounce in 2027, reducing export earnings.
It also expects cocoa production to fall by 9.1 percent, partly due to weather disruptions associated with El Niño.
Meanwhile, Fitch Solutions said the BoG’s objective of building reserves equivalent to 15 months of import cover by 2028 was highly ambitious and unlikely to be achieved.
It expects the central bank to maintain positive real interest rates as policymakers seek to support portfolio investment inflows and strengthen the country’s external buffers.
The projections highlight the risks to Ghana’s recent disinflation gains, with developments in the exchange rate, food and energy prices, money supply and external financing conditions likely to shape the inflation outlook through 2027.
Source: businesspostonline
