The Governor of the Bank of Ghana, Dr. Johnson Asiama, has cautioned that escalating tensions in the Middle East could pose risks to Ghana’s improving inflation outlook.

Speaking at the opening of the 129th Monetary Policy Committee (MPC) meeting, Dr. Asiama noted that the evolving geopolitical situation could have significant implications for Ghana’s economic stability.

“A significant external development has entered the picture, and that has to do with the escalation of the conflict in the Middle East. This conflict is disrupting key energy and shipping corridors,” he said.

He explained that the situation is contributing to volatility in global oil markets and creating uncertainty around the trajectory of global inflation.

“It is increasing volatility in global oil markets, and it is introducing new uncertainty into the trajectory of global inflation,” he added.

Dr. Asiama warned that the conflict could translate into higher costs for Ghana through imported inflation.

“For Ghana, the transmission channels are clear. Sustained oil price increases could raise the risk of imported inflation and could also tighten global financial conditions,” he stated.

However, the Governor noted a potential silver lining, explaining that rising geopolitical tensions could support global gold prices, which may benefit Ghana’s trade balance.

“Geopolitical uncertainty tends to support gold prices… This could benefit our trade balance,” he said.

He added that these external developments will be considered by the MPC as it deliberates on the appropriate policy stance, including whether to adjust the policy rate.

Dr. Asiama emphasized that, while Ghana’s macroeconomic indicators have improved significantly, the Committee must carefully weigh global risks before making any policy decision. The MPC’s upcoming decision on the policy rate will therefore reflect both the progress made in stabilizing the economy and the emerging uncertainties in the global environment.