UK-based economic analysis firm Fitch Solutions has cautioned that a significant drop in global gold prices could have serious repercussions for Ghana’s economy.
The firm explained that such a scenario, driven by a shift toward traditional trade policies in the United States or the resolution of major global geopolitical tensions, would swiftly deplete Ghana’s international reserves.
According to Fitch Solutions, “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.” The forecast forms part of the company’s downside risk outlook for Ghana.
On the other hand, the firm notes that a continued appreciation of the Ghana cedi could ease inflationary pressures faster than previously projected. “This would support stronger private consumption and prompt the Bank of Ghana to ease monetary policy more rapidly, which would stimulate credit uptake,” the report added.
Regarding government expenditure, Fitch Solutions anticipates a negative contribution from public consumption in 2025. This, it explained, is due to the government’s fiscal consolidation efforts under Ghana’s programme with the International Monetary Fund.
The report further indicated that private consumption is expected to benefit from stronger exchange rates and sustained gold prices. The disinflation process, it said, would ease pressure on household budgets and bolster consumer spending over the next few quarters.
