The Bank of Ghana expects a recent rise in inflation to be temporary as the economy continues to expand, Governor Johnson Pandit Asiama said, while warning that global risks including higher oil prices could still weigh on the outlook.

Inflation rose to 5.3% in June from 3.7% in May, driven mainly by higher transport costs following an increase in global crude oil prices, Asiama said in remarks to business stakeholders in Sunyani on Wednesday.

“We believe this is temporary, and we will continue to monitor developments closely to ensure that inflation remains under control,” he said.

The Bank of Ghana’s Monetary Policy Committee last month kept its benchmark monetary policy rate at 14%, saying the decision struck a balance between containing inflation and supporting economic activity.

Ghana’s economy expanded 6.4% in the first quarter, up from 6.2% in the same period last year, with growth driven mainly by the services and industrial sectors, Asiama said.

He said economic activity had strengthened across several areas, including bank lending, trade, industrial production and tourism, while businesses and consumers were becoming more confident about the outlook.

The central bank governor also pointed to a sharp increase in private-sector credit as evidence of improving financial conditions.

Credit to businesses and households grew by more than 41% in June from about 9% a year earlier, he said, adding that lower lending rates were making it easier for businesses to access financing for investment and expansion.

Ghana’s banking sector remains “strong and stable”, with banks well-capitalised, deposits continuing to grow and loan quality improving, Asiama said.

The country’s external position has also remained resilient, supported by strong gold and cocoa exports, which helped generate a higher trade surplus in the first half of the year.

But higher global oil prices have increased Ghana’s import bill, he said.

Foreign exchange reserves stood at about US$12.9 billion, equivalent to roughly five months of import cover, providing a buffer against external shocks and supporting stability in the foreign exchange market.

The cedi came under pressure earlier this year amid global developments, including the conflict in the Middle East, but has since recovered, Asiama said.

“We remain committed to maintaining an orderly and well-functioning foreign exchange market,” he said.

The governor cautioned that Ghana should not become complacent despite the improving economic indicators, saying developments in the global economy could still affect the country.

The central bank would continue to focus on protecting the value of the cedi, keeping inflation low, preserving financial stability and supporting sustainable economic growth, he said.

“Macro-economic stability is not the responsibility of the Bank of Ghana alone – it is a partnership between policymakers, businesses, financial institutions, traders, farmers, and households,” Asiama said.

The comments come as Ghana seeks to consolidate recent gains in macroeconomic stability after years of high inflation, currency volatility and debt pressures.