The Bank of Ghana (BoG) has disclosed that the country’s credit-to-GDP gap remained negative, although it continued to improve gradually, signalling a steady recovery in private-sector credit growth.
In its latest Monetary Policy Report, the Central Bank said the indicator suggests that lending to the private sector is still growing below its long-term trend or that economic output is expanding faster than credit.
A negative credit-to-GDP gap is generally associated with a period of credit contraction.
Limited financial stability risks
According to the Bank of Ghana, the continued negative gap points to limited systemic risks arising from excessive credit growth.
It added that the current trend provides room for measured credit expansion to support economic activity without threatening financial stability.
“Sustained favourable macroeconomic conditions, together with the continued resilience of the banking sector, remain critical to supporting the recovery in credit growth while preserving financial stability,” the report said.
Macro-financial risks ease
The Central Bank also reported that macro-financial risks to the banking sector moderated as of the end of March 2026 compared with the same period last year.
It attributed the improvement to favourable global and domestic economic conditions.
According to the report, easing lending conditions and lower inflation globally contributed to improved financial conditions and greater stability in the external environment.
Domestically, exchange rate stability, easing inflation, stronger foreign reserves and declining public debt helped improve macroeconomic conditions and reduce systemic vulnerabilities.
The Bank added that businesses and households also recorded improvements in their ability to service debt, reflecting the stronger economic environment.
Middle East conflict remains a concern
Despite the positive outlook, the Bank of Ghana warned that the ongoing conflict in the Middle East could pose risks to Ghana’s economy.
It said rising geopolitical tensions could increase import costs and create fresh macroeconomic challenges.
The Central Bank stressed the need for close coordination between monetary and fiscal authorities to minimise the potential impact of global developments on the domestic economy.
