AfDB ups Ghana's growth outlook to 4.5%
The African Development Bank (AfDB) has revised its growth forecast for Ghana to 4.5 per cent in 2025, driven by a recovery in the mining sector, fiscal consolidation, and tighter monetary conditions.
According to the AfDB's African Economic Outlook report, Ghana's economy is expected to accelerate to 4.8 per cent in 2026, assuming continued macroeconomic stability and policy discipline.
The report highlights that growth will be supported by improved mineral output, particularly in gold, ongoing fiscal adjustments, and a more favorable external environment.
The AfDB's forecast is more optimistic than those issued by other multilateral institutions and Ghanaian authorities.
The Finance Minister's 2025 Budget Statement projected real GDP growth of 4.0 per cent, while the World Bank's Africa's Pulse Report put the figure at 3.9 per cent, rising to 4.6 per cent in 2026.
The International Monetary Fund (IMF) aligned with the government's projection, forecasting 4.0 per cent growth in 2025 and 4.8 per cent the following year.
The diverging forecasts underscore the complexity of economic forecasting and the need for careful analysis of various factors influencing economic performance.
Inflation concerns
Despite the positive growth outlook, the AfDB expressed concerns about inflation, projecting end-2025 inflation at 15.4 per cent, well above the government's 11.9 per cent forecast and the Bank of Ghana's 12 per cent target.
However, the AfDB expects inflation to return to single digits by end-2026, aided by stable food prices, a firm exchange rate, and tight monetary policy.
The inflation forecast highlights the challenges facing the Bank of Ghana in maintaining price stability, particularly in the face of external shocks and domestic supply-side constraints.
Debt management
The AfDB expects Ghana's fiscal deficit to narrow to 3.5 per cent of GDP in 2025 and 3.0 per cent in 2026, driven by ongoing fiscal consolidation and strengthened public financial management.
The debt-to-GDP ratio is projected to decline to 66.4 per cent in 2025, reflecting progress on domestic and external debt restructuring as well as improved revenue mobilisation.
The fiscal consolidation efforts are critical in reducing Ghana's debt burden and creating fiscal space for critical investments in infrastructure, healthcare, and education.
Currency stability
The AfDB expects a current account surplus of 2.6 per cent of GDP in 2025, narrowing to 1.4 per cent in 2026, driven by increased oil and gold exports.
The cedi is expected to stabilise in real terms, supported by foreign exchange inflows and monetary policy tightening. The stability of the cedi is crucial for maintaining investor confidence and promoting economic growth.
Downside risks
Despite the improving macroeconomic picture, the AfDB cautioned that risks to the outlook remain firmly on the downside. These include climate shocks, delays in fiscal reforms, and potential external headwinds such as U.S. tariff hikes.
The Bank stressed the importance of policy continuity, warning that any reversal in consolidation efforts or weakening of institutional reforms could undermine investor confidence and macroeconomic gains.
The downside risks highlight the need for Ghana to maintain a prudent economic policy framework and build resilience to external shocks.
The AfDB's revised growth forecast for Ghana reflects the country's improving macroeconomic prospects, driven by a recovery in the mining sector and fiscal consolidation.
However, the report also highlights the need for continued policy discipline and structural reforms to anchor stability and enhance resilience in the face of persistent global uncertainties.
As Ghana navigates its economic journey, it is essential that policymakers maintain a focus on promoting economic growth, reducing debt, and improving the lives of Ghanaians.