Gold prices crossed US$3,000 per fine ounce on account of economic uncertainty caused by geopolitical tensions – Asiama

Governor of the Bank of Ghana, Dr Johnson Asiama has said that prices of Ghana’s major export commodities traded mixed on the international commodities market in early 2025.

He said during the 123rd Monetary Policy Committee (MPC) press conference in Accra on Friday, March 28 that “Gold prices crossed the US$3,000 per fine ounce on March 14, 2025, on account of heightened economic uncertainty triggered by the trade and geopolitical tensions, persistent inflation, and weakening US dollar.”

In February 2025, he said, gold prices averaged US$2,897.3 per fine ounce, indicating a year-on-year growth of 9.7 percent. Similarly, crude oil prices recorded a marginal annual growth of 2.4 percent to settle at an average price of US$74.95 per barrel.

Cocoa prices, however, declined by 8.5 percent driven by improving supply outlook for the current 2024/25 season, Dr Asiama stated.

In the banking sector, Dr Asiama said that banks’ performance continued to improve.

Total bank assets recorded 34.0 percent growth at the end of February 2025 relative to 12.1 percent growth, in the same period last year, he said.

With regulatory reliefs, the banking industry’s Capital Adequacy Ratio (CAR) was higher at 14.4 percent compared to 13.6 percent in the same period last year, Dr Asiama added.

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“Without reliefs, CAR was 12.1 percent. The industry’s Non-Performing Loan (NPL) ratio declined to 22.6 percent in February 2025 from 24.6 percent in February 2024. Excluding the loans in the loss category, which are fully provisioned, the NPL ratio as at end-February 2025 was 8.9 percent,” he said.

Dr Asiama further stated that overall, the Financial Soundness Indicators showed broad improvements in asset growth, solvency, liquidity, efficiency, and profitability.

.The fiscal policy stance was more expansionary than expected in 2024. The 2024 fiscal deficit, on commitment basis, was 7.9 percent of GDP against a target of 3.8 percent of GDP, on the back of higher expenditures than target.

“This notwithstanding, early indications from banking sector data suggest some improvements in fiscal performance in early 2025.

“This, along with the commitment to fiscal consolidation presented in the 2025 budget, should support the fiscal outlook. Also, the ratio of public debt declined supported by the debt restructuring,” he said.

Dr Asiama also said that private sector credit is beginning to show signs of recovery.

In February 2025, he said, private sector credit recorded 26.9 percent annual growth, compared with 5.1 percent in February 2024. In real terms, he added, credit growth was 3.1 percent, compared with a decline of 14.7 percent in February 2024.

 

 

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