Ghana’s credit-to-Gross Domestic Product (GDP) gap remained negative during the first eight months of 2026, signalling limited systemic risks and room for measured credit expansion to support economic activity.
According to the Bank of Ghana’s October 2026 Banking Sector Development Report, credit continued to grow, but at a slower pace relative to the expansion of the economy.
The central bank said the negative credit-to-GDP gap indicated the absence of excessive credit accumulation, suggesting that the financial system remained in a relatively low-risk environment.
“The negative gap points to the absence of excessive credit build-up and limited systemic risks and signals room for measured credit expansion to further support the real sector of the economy,” the report stated.
The Bank of Ghana attributed the recovery in credit growth to the resilience of the banking sector, which continues to support financial intermediation and the flow of funds to businesses and households.
It added that favourable macroeconomic conditions were expected to sustain the recovery in private sector credit without undermining financial stability.
Macroeconomic Risks Ease
The Bank of Ghana’s macro-financial risk assessment also showed a moderation in projected risks at the end of September 2026 compared with the same period in 2025.
Risks associated with the global macroeconomic environment declined, supported by lower inflation and easing lending conditions in advanced economies.
Domestically, the risk outlook improved on the back of a declining fiscal deficit, lower inflation, exchange-rate stability and a reduction in public debt.
The central bank also reported a decline in risks associated with the corporate and household sectors, reflecting improved capacity among businesses and households to meet their debt obligations.
These developments point to an improvement in the broader economic environment and the ability of borrowers to manage their financial commitments.
Middle East Tensions Remain a Potential Risk
Despite the improvement in the domestic risk outlook, the Bank of Ghana cautioned that future developments could be influenced by geopolitical tensions in the Middle East.
The central bank noted that global developments could have implications for Ghana’s economy, businesses and households, potentially affecting the country’s macro-financial stability.
Nevertheless, it maintained a favourable near-term outlook for the domestic economy, citing expectations of low inflation, strong reserve accumulation and improved financing conditions.
“Notwithstanding” the potential external risks, the report indicated that these supportive conditions were expected to underpin the economy in the near term.
The assessment suggests that Ghana has room to expand credit in a measured manner to support productive economic activity, although maintaining financial stability will remain important as global uncertainties persist.
