The Governor of the Bank of Ghana, Dr Johnson Asiama, has highlighted that while escalating tensions in the Middle East pose risks to Ghana’s inflation outlook, the situation could also provide a boost to gold prices, offering potential support to the country’s trade balance.

Speaking at the opening of the 129th Monetary Policy Committee (MPC) meeting, Dr. Asiama explained that the conflict is disrupting key global energy and shipping routes and increasing volatility in oil markets, which could translate into higher imported inflation for Ghana.

“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 stated.

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

Despite these risks, the Governor highlighted the potential positive impact on gold prices, noting:

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

Dr Asiama stressed that these external developments will form part of the MPC’s considerations as it evaluates the appropriate policy stance, including any adjustments to the policy rate.

“Although Ghana’s macroeconomic indicators have improved significantly, the committee must carefully weigh global risks before making any decision. The MPC’s decision on the policy rate will, therefore, reflect both the progress made in stabilising the economy and the emerging uncertainties in the global environment,” he noted.

The governor’s remarks underscore the dual impact of global events on Ghana’s economy: while oil price volatility could increase costs, rising gold prices present an opportunity to strengthen the nation’s trade balance and provide a buffer against external shocks.