FITCH Solutions warns that a sharp decline in global gold prices, potentially triggered by changes in US trade policies or easing geopolitical tensions, could severely weaken the cedi, surge inflation and interest rates.

The rating agency said this could severely weaken Ghana’s external buffers and renew downward pressure on the cedi.

In its latest country risk outlook, the UK-based research and analytics firm warned that such a scenario would strain the Bank of Ghana’s capacity to defend the local currency, potentially unleashing another round of cedi depreciation.

“This would keep inflation elevated, lead to a weakening in consumer and investor sentiment and prompt the central bank to keep interest rates higher for longer,” Fitch noted in its downside risk assessment.

Ghana’s foreign exchange reserves have recently benefitted from strong gold exports amid record-high prices, with the mineral playing a critical role in stabilising the cedi and anchoring inflation expectations.

Cedi strength

Conversely, Fitch said a further appreciation of the cedi would accelerate the disinflation process, enabling the central bank to ease interest rates earlier than currently projected.

This, in turn, would support private consumption and stimulate credit growth across the economy.

“Stronger private consumption on the back of currency stability and lower inflation would create positive spillovers for domestic demand,” the report added.

Govt spending

In its fiscal outlook, Fitch forecasts a contraction in government consumption in 2025 as the country presses ahead with expenditure controls under its IMF-supported fiscal consolidation programme.

“The contribution of government consumption will be negative in 2025,” the report stated, pointing to ongoing policy adjustments aimed at restoring macroeconomic stability.

Nonetheless, the firm expects private consumption to remain relatively resilient, supported by a stronger exchange rate environment and elevated gold prices, which are expected to ease pressure on household budgets.

With Ghana’s economic outlook delicately balanced between commodity price dynamics and policy discipline, it is expected that sustained investor confidence will depend heavily on both the credibility of macroeconomic management and the country’s ability to shield itself from external shocks.

Fitch’s projections serve as a timely reminder of the vulnerability of Ghana’s economy to fluctuations in global commodity markets, even as policymakers seek to build resilience through structural reforms and tighter fiscal control.

Growth forecast

Fitch Solutions has revised Ghana’s 2025 real economic growth forecast from 4.2 per cent to 4.9 per cent.

This follows what it described as a stronger-than-anticipated quarter one 2025 results.

Data released by the Ghana Statistical Service on June 6, 2025, showed that real GDP growth accelerated from 3.6 per cent year-on-year in quarter 4, 2024, to 5.3 per cent in quarter 1, 2025, surpassing Fitch Solutions' expectation that growth would have remained around the 3.5 per cent mark.

“The quarter one growth spurt was primarily driven by stronger agricultural output, particularly in crop production and fishing.

The mining and quarrying sector also performed better than in the previous quarter, despite continued weakness in the hydrocarbons sector, pointing to growing momentum in gold extraction amid elevated prices.

In addition, faster growth in domestic trade also supported headline economic growth, indicating improving consumer activity across the economy”, the UK-based firm said.

It continued that consumer spending will continue to drive growth over the remainder of the year as a stronger cedi pushes down inflation. 

The price of gold—already high due to geopolitical tensions and central bank purchases—has increased further due to uncertainty around US President Donald Trump’s trade policies.