ISSER flags weak growth outlook in 2026 budget

The Institute of Statistical, Social and Economic Research (ISSER) has has raised fresh concerns about Ghana’s growth prospects for 2025 and beyond, warning that the country’s economic recovery could weaken unless structural gaps highlighted in the 2026 Budget are addressed urgently.

The institute insisted that although government has made notable gains in fiscal consolidation and tax reforms, the projected GDP growth of 4.8 per cent for 2025 appears “a bit low”, given the economy’s stronger performance in the first two quarters of 2025.

Speaking at the post-budget review by ISSER in Accra, the Director of the institute, Prof. Robert Darko Osei, stated that growth averaged 6.3 per cent in the first half of 2025, which makes the full-year projection of 4.8 per cent difficult to reconcile without assuming a sharp slowdown in the last two quarters of the year. 

Growth drivers 

The director stated that the breakdown of the real sector points to services as the main driver of growth in 2025, projected at 6.4 per cent, boosted by strong performances in ICT (12.5 per cent), financial services (11.1 per cent), education (8.5 per cent) and health and social work (7.3 per cent). 

However, he said services growth was expected to moderate to 5.6 per cent in 2026, suggesting a potential softening of the very sectors that sustained the recovery.

He said the industrial sector, which contracted sharply in recent years, presents a more worrying picture.

He said a projected drop in industrial growth from 7.1 per cent in 2024 to 3.6 per cent in 2025, driven by a steep decline in oil and gas output (–20.6 per cent) and a 9.6 per cent deceleration in construction. 

He stressed that agriculture offers some relief, with growth improving from 2.8 per cent to 3.8 per cent, supported by a rebound in the cocoa subsector and strong outturns in fishing—the fastest-growing activity at 5.1 per cent.

He expressed fear that these uneven sectoral performances could weaken the foundations of Ghana’s medium-term recovery unless productivity, value addition and structural transformation were prioritised.

Global headwinds 

With global growth expected to slow from 3.6 per cent in 2022 to 3.1 per cent in 2026, he said ISSER does not expect Ghana to gain strong external growth dividends. 

Although disinflation is underway globally, he said the institute notes that Ghana’s much faster decline in inflation—compared to ECOWAS peers—signals that domestic monetary policy has been broadly effective. 

He warned that lower inflation should not come at the expense of job creation and economic transformation.

Sustaining growth 

The director commended the government for narrowing the fiscal deficit and reducing expenditure pressures—particularly through lower interest payments and restrained capital spending.

He cautioned that Ghana could not drive long-term economic transformation while allocating only 1.7 per cent of GDP to capital expenditure in 2025, well below the sub-regional average of 10 per cent.

He added that the passage of the Fiscal Council Bill and the new debt ceiling of 45 per cent of GDP as “very positive steps”.