Professional services firm, Deloitte, is predicting a persistent reduction in interest rates in 2025 on the back of a sustained disinflationary trend.

It is thus forecasting an end-year policy rate of 22.5% in 2025.

This will come as a huge relief for households and businesses as cost of borrowing will fall significantly.

“The BoG [Bank of Ghana] cut its benchmark interest rate twice in 2024 by a cumulative 300 basis points to close the year at 27% per annum. The return to a neutral monetary policy stance is the beginning of an accommodative posture and was driven by the decline in inflation that occurred for almost half of the year. The reduction in interest rates is expected to persist and more frequently in 2025 on the back of a sustained disinflationary trend”, Deloitte West Africa revealed in a report titled ““Sneak Preview of 2025”.

Deloitte had also forecasted an average inflation of 11.9% in 2025.

Implications and Risks

The leading professional services pointed out that an expansionary policy stance is positive for the overall Ghanaian economy as more credit would be made available for business expansion and consumer spending picks up.

Also, the risk of bad debt in the books of banks would reduce, adding, there are short term risks to the accommodative policy outlook, and these include supply chain disruptions exacerbating the high inflation environment and a resurgence in cedi volatility.

In November 2024, the Monetary Policy Committee of the Bank of Ghana maintained the policy rate at 27%.

It cited a slightly elevated profile driven by high and unstable food prices, pass-through of previous exchange rate pressures, fuel prices and utility tariff adjustments.