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Businesses have expressed confidence that the recent economic stability will continue into the next three months of the year to enable them to plan for growth and profitability.
The consumer confidence also soared to 103.6 points in April this year, up from 87.7 points in the same period last year, with business confidence also recording 102.2 points, up from 92.6 points in the same period last year.
The renewed confidence, which is the highest recorded since April 2018, comes at the back of declining inflation, the cedi appreciating against all the major international currencies, improved reserves and other relative improvements in some major macroeconomic indicators.
The Bank of Ghana’s (BoG) latest confidence survey released last Thursday ahead of its Monetary Policy Committee (MPC) meeting paints a promising picture of a potential economic upswing.
Despite the trend, the MPC decided to maintain the policy rate at 28 per cent for the second time this year in an ongoing effort to further stabilise the economy.
“The committee observed that the current level of inflation remains high relative to the medium-term target and will require maintaining the tight stance to reinforce the disinflation process.
“Under the circumstances, the committee, by a unanimous decision, maintained the policy rate at 28.0 per cent,” the Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, said at the 124th MPC press conference in Accra last Friday.
He said based on easing inflationary pressures and optimism about macroeconomic conditions, the latest confidence surveys showed significant improvement in consumer and business indices, the highest in the last seven years.
“The bank’s high frequency real sector indicators point to a sustained pickup in economic activity.
The updated Composite Index of Economic Activity increased by 2.3 per cent year-on-year in March 2025, compared with 1.0 per cent over the same period last year, mainly driven by exports, credit to the private sector and construction activities,” Dr Asiama said.
In addition, the Ghana Purchasing Managers’ Index rose above the 50-benchmark as output and new orders increased, signalling improved growth prospects, he added.
Dr Asiama stated that headline inflation had declined consecutively in the first four months of the year by 2.6 percentage points to 21.2 per cent in April 2025, driven by both food and non-food inflation.
He said that a confluence of factors, including a tight monetary policy stance, stepped-up liquidity sterilisation efforts, downward revisions in ex-pump petroleum prices and exchange rate stability had supported the gradual decline in inflation.
The Governor said the bank’s core inflation measure, which excluded the volatile variables of energy and utility prices, as well as inflation expectations of consumers, businesses and the banking sector, pointed to easing inflationary pressures.
Dr Asiama said fiscal policy implementation so far had been broadly aligned with the 2025 budget.
The Governor added that in the first quarter of 2025, provisional data on budget execution indicated that although revenues fell below target, some expenditure rationalisation took place to accommodate the revenue shortfall.
Dr Asiama maintained that the primary fiscal balance (on commitment basis) had also improved in the first quarter.
At the end of March 2025, he said the stock of public debt stood at GH¢769.4 billion (55 per cent of Gross Domestic Product -GDP), compared with GH¢726.7 billion (61.8 per cent of GDP) at end-December 2024.
He said continued maintenance of a strict fiscal consolidation for the 2025 fiscal year would further strengthen the ongoing recovery process and firm up macroeconomic stability.
The external sector has continued to improve, with a record provisional current account surplus of $2.1 billion in the first quarter of 2025, driven mainly by higher prices and increased production volumes of gold and cocoa, and strong remittance inflows.
Bank of Ghana’s Macroeconomic and Financial Data indicate that total exports went up to $9.32 billion at the end of April this year, compared to the $5.81 billion recorded in the same period last year.
Gold exports contributed $5.24 billion at the end of April this year, compared to the $2.97 billion in the same period last year, with crude oil exports hitting $972 million, a dip from the $1.27 billion exported in the same period last year.
Cocoa exports yielded $1.84 billion, compared to the $579.6 million exports in the same period last year.
Other exports recorded $1.27 billion within the period, up from the $985.8 million in the same period last year.
Dr Asiama said those developments led to a current account surplus and, together with net outflows in the capital and financial account, resulted in an overall Balance of Payments surplus of $1.1 billion.
He explained that the strong external performance resulted in significant reserve accumulation while Gross International Reserves (GIR) amounted to $10.7 billion in April 2025, equivalent to 4.7 months of import of goods and services.
Broadly, he added that the external sector outlook remained favourable, largely anchored on expectations of increased gold and cocoa export receipts, as well as inflows from remittances.
Dr Asiama stated that the cedi’s strong rebound against the major trading currencies was driven by a combination of factors, including a tight monetary policy stance, ongoing fiscal consolidation, record reserve accumulation, strict enforcement of foreign exchange market rules, and improved market sentiments.
“In the year to May 21, 2025, the cedi had appreciated against all the major currencies – 24.1 per cent against the US dollar, 16.2 per cent against the British pound, and 14.1 per cent against the euro.
“The latest forecast points to continued easing of inflationary pressures on the back of tight monetary policy stance, exchange rate stability, and fiscal consolidation,” the Governor said.
Dr Asiama added that inflation was expected to ease faster towards the medium-term target in the first quarter of 2026, as opposed to the second quarter as earlier envisaged, barring unanticipated shocks.
