Ghana 2026 Budget Review: Strong Disinflation and Interest Rate Cuts Create Foundation for Economic Recovery – CPS Insights

Discover how Ghana’s ongoing disinflation and declining interest rates are setting the stage for robust economic recovery in 2026, according to the Centre for Policy Scrutiny (CPS) budget review. This analysis breaks down fiscal strategies, monetary policy shifts, and growth drivers for sustainable development in Ghana.

Introduction

Ghana’s economy is showing promising signs of stabilization, with strong disinflation and interest rate reductions forming a solid basis for economic recovery in 2026. The Centre for Policy Scrutiny (CPS), a leading think tank, presented its comprehensive 2026 budget review during a media briefing on November 20, 2025. This CPS budget analysis praises the government’s fiscal and monetary policies for delivering tangible results, including price stability and lower borrowing costs.

At the heart of this optimism is Ghana’s disinflation trajectory—defined as a sustained slowdown in the inflation rate—which has been complemented by falling policy rates from the Bank of Ghana (BoG). These factors are expected to stimulate private sector growth, job creation, and infrastructure development. Dr. Adu Owusu Sarkodie, CPS Executive Director, emphasized: “Ghana is witnessing a welcome period of strong disinflation and lower interest rates, which together form the foundation for a robust economic recovery in 2026.”

This introduction sets the context for understanding how fiscal prudence and monetary discipline in Ghana are aligning to support medium-term economic recovery goals.

Analysis

Fiscal Measures Driving Macroeconomic Stability

The CPS 2026 budget review details how targeted fiscal policies have improved revenue collection while curbing non-essential spending. This approach has maintained macroeconomic balance, a critical pillar for Ghana’s disinflation process. By enhancing tax administration and expenditure controls, the government has created fiscal space for productive investments.

Monetary Policy and Interest Rate Dynamics

A key highlight is the projected easing of the Bank of Ghana’s policy rate. Lower interest rates reduce borrowing costs, making credit more accessible for key sectors like agriculture, manufacturing, and housing. In economic terms, this stimulates investment and consumption, accelerating GDP growth. The CPS notes that these monetary policy adjustments are yielding positive effects, evidenced by declining lending rates across Ghana’s financial system.

Infrastructure Investments as Growth Catalysts

Infrastructure receives significant emphasis in the 2026 budget, with allocations for road networks, energy projects, and urban housing. These initiatives align with Ghana’s medium-term economic recovery framework, promoting sustainable innovation and long-term growth. Improved infrastructure enhances productivity, reduces logistics costs, and attracts foreign direct investment (FDI).

Summary

In summary, the CPS budget review positions Ghana’s 2026 fiscal plan as a milestone for economic restoration. Strong disinflation—where inflation rates have moderated significantly—and interest rate cuts by the Bank of Ghana are enabling private sector-led expansion. Fiscal discipline has stabilized prices, while infrastructure spending targets job creation and industrialization. However, sustained reforms are essential to navigate external risks and realize full recovery potential by 2026.

Key Points

Practical Advice

For Businesses and SMEs

Leverage falling interest rates in Ghana by refinancing existing loans and expanding operations in high-potential sectors like agriculture and manufacturing. SMEs should monitor Bank of Ghana announcements for policy rate updates and prepare financial plans to capitalize on lower borrowing costs. Engage with government infrastructure projects for supply chain opportunities.

For Policymakers and Investors

Prioritize revenue mobilization through digital tax systems and public-private partnerships (PPPs) for infrastructure. Investors should focus on sectors aligned with the 2026 budget, such as energy and housing, while diversifying to mitigate commodity price risks. Continuous stakeholder consultations ensure inclusive policy implementation.

For Households and Entrepreneurs

With disinflation stabilizing prices, households can plan for increased disposable income. Entrepreneurs are advised to seek SME loans now, as rate cuts will enhance affordability and support job-creating ventures.

Points of Caution

The CPS review underscores that Ghana’s path to 2026 economic recovery faces hurdles. External risks, including global commodity price volatility—such as fluctuations in oil, cocoa, and gold—and shifts in international financing conditions, could disrupt domestic performance. For instance, tighter global monetary policies might reverse capital flows to emerging markets like Ghana.

Domestically, the CPS calls for vigilance in reform execution: bolstering revenue collection efficiency, optimizing public investment outcomes, and building private sector resilience. Without these, disinflation gains could erode. Dr. Sarkodie stressed the need for ongoing monitoring of fiscal and monetary trends to sustain momentum.

Comparison

Versus Previous Budget Cycles

Compared to prior years, the 2026 budget marks a shift toward greater fiscal prudence, with stronger emphasis on expenditure controls and revenue enhancement. Earlier budgets faced higher inflation pressures, but current disinflation trends—supported by BoG rate adjustments—represent improvement. For example, while 2024-2025 saw volatile interest rates amid debt restructuring, 2026 projections indicate a more stable environment conducive to growth.

Global Emerging Market Context

Ghana’s trajectory mirrors other African economies like Kenya and Nigeria, where disinflation and rate cuts have spurred recovery post-pandemic. However, Ghana’s infrastructure focus provides a competitive edge, aligning with IMF-supported medium-term frameworks more robustly than peers.

Legal Implications

The 2026 budget’s fiscal policies operate within Ghana’s established legal framework, including the Public Financial Management Act (2016) and Fiscal Responsibility Act. These laws mandate balanced budgeting and debt sustainability, ensuring compliance with revenue mobilization and expenditure controls. No new legal controversies arise from the CPS review; measures reinforce statutory requirements for transparency and accountability in public finances.

Conclusion

The CPS 2026 budget review paints an optimistic yet pragmatic picture of Ghana’s economic recovery. Strong disinflation and interest rate reductions by the Bank of Ghana are foundational, enabling fiscal space for infrastructure and private sector growth. By addressing cautions through vigilant reforms and stakeholder engagement, Ghana can achieve sustainable development and job creation by 2026. This analysis underscores the power of disciplined policies in transforming economic challenges into opportunities for all Ghanaians.

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