Page 34 - RFHL ANNUAL REPORT 2025 ONLINE_NEW

32 • Republic Financial Holdings Limited 2025 Annual Report • EXECUTIVE REPORTS

Chairman’s Review

International price pressures eased further in 2025, with
varying trends among individual nations. Global inflation is As a Board, we serve as stewards of the
expected to fall to 4.2 percent from 5.7 percent a year earlier, Group, exercising independent judgement
due to subdued demand and weaker energy prices. The in overseeing management and supporting
impact of tariffs is expected to gradually filter through the US the Group’s operating and financial strength
economy, with countries dependent on imports from the US and resilience and in so doing safeguard the
also likely to be affected. However, in some cases the increased interests of shareholders. We also recognise
levies are expected to negatively affect demand and thereby that the Group is not a passive participant in
reduce price pressures. With signs of weakening economic
activity and reduced inflationary pressures, the European the many societies and communities where we
Central Bank (ECB), Bank of England (BOE) and the Federal operate and we therefore take responsibility
Reserve (Fed) reduced their policy rates in 2025. The Fed’s cut for our commitments and actions.
lagged that of the ECB and BOE as it awaited more data on
the impact of the tariffs on the economy.

The economies in which RFHL operates Outlook

The economies in which the RFHL Group operates The 3 percent expansion of the global economy in 2025
registered positive performances in 2025, with encouraging represents more than just a weaker performance than the
developments in key sectors. Activity in the tourism sector was previous year. It is also illustrative of its continued resilience
heartening, notwithstanding a generally slower rate of growth. in the face of tremendous uncertainty, spawned by seemingly
The slowdown was the consequence of tourist arrivals in most ever-increasing challenges. This buoyancy is expected to
destinations having previously returned to (or close to) pre- continue in 2026, with real GDP projected to increase by 3.1
pandemic levels and heightened global economic uncertainty. percent, a level, though still below the pre-pandemic average
The sector benefitted from new and ongoing investments in of 3.7 percent, is encouraging, given that many of the existing
accommodations and other tourism-related infrastructure, headwinds are expected to linger. Growth among advanced
which contributed to upbeat construction activity in economies is expected to increase slightly to average 1.6
several countries. The commodity-producing nations faced percent, while emerging and developing economies are
contrasting oil and gas price trends, with the former declining predicted to expand by 4 percent. Nevertheless, the global
appreciably compared to 2024, while gas prices rose. The economy faces key downside risks, including the possible
continued rally of international gold prices provided a much- failure of the US and China to secure a trade agreement, which
needed boost to the revenue and foreign exchange streams of could constrain economic activity in the world’s two largest
the gold-exporting countries. After averaging US$2,386.20 per economies. An escalation of geopolitical tensions, particularly
troy ounce in 2024, gold prices averaged US$3,198.84 in the as it relates to the Russia-Ukraine war and the ongoing conflict
first nine months of 2025. As it relates to inflationary pressures, in the Middle East, continues to be a potential significant
the experience was mixed, with some RFHL countries weight on the global economy, notwithstanding growing
benefitting from reduced headline inflation rates, while others optimism regarding a possible Israel-Hamas ceasefire deal. An
were confronted with accelerations. Encouragingly, inflation acceleration of global inflation could negatively affect growth
in Suriname declined significantly from 16.2 percent in 2024 as it may constrain consumption and cause major central
to average 8.3 percent during the first eight months of 2025, banks to pause or reverse policy rate reductions. Upside risks
largely due to the increased stability of the domestic currency. include a deceleration of inflation at a faster pace than initially
On the other hand, prices advanced by an average of 18.2 envisaged and a relatively quick breakthrough in outstanding
percent in Ghana, during the same period in 2025. Positively, trade agreements between the US and its partners, which
there were signs of notable slowing between May and August, could help to ease uncertainty.
in response to tightened monetary policy and an appreciation
of the Cedi.