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Economy expands by 5.3% in Q1 - Services, agric lead recovery

Kweku Zurek Jun - 12 - 2025 , 12:01 4 minutes read

Ghana’s economy recorded growth of 5.3 per cent year-on-year in the first quarter of this year, marking an acceleration from the 4.9 per cent growth recorded in the same period last year.

The rebound, according to the Ghana Statistical Service (GSS), was primarily driven by solid performances in Information and Communication, Manufacturing, Wholesale and Retail Trade; Repair of Motor Vehicles, Transport & Storage and Finance & Insurance sub-sectors.

All together these sectors contributed about 84.5 per cent of the 5.3 per cent growth.

“This momentum reflects more than just numbers. It signals recovery and the confidence of an economy finding its rhythm in a very complex global environment,” the Government Statistician, Dr Alhassan Iddrisu, told journalists at a press briefing in Accra yesterday.

He said Public Administration, Defence, Social Security, Education, Water Supply, Sewerage, Waste Management & Remediation, and Forestry & Logging were the main sub-sectors that contracted in the first quarter of the year.

Sectoral breakdown

The Government Statistician said the services sector maintained its position as the largest contributor to national output, accounting for 46.8 per cent of total productivity within the economy, measured by Gross Domestic Product (GDP) at basic prices.

It also recorded a growth rate of 5.9 per cent compared to the same quarter last year.

Within services, Information and Communication emerged as the best-performing sub-sector, registering a growth rate of 13.1 per cent year-on-year and 3.1 per cent over the previous quarter (quarter-on-quarter). Financial and Insurance Activities followed with 9.3 per cent, while Transport and Storage expanded by 8.6 per cent.

Wholesale and retail trade also contributed significantly, growing by 7.1 per cent.

The services sector alone contributed 2.54 percentage points to the overall GDP growth of 5.3 per cent, underlining its role as the key driver of economic expansion.

Agriculture records recovery

After a slow 2024, the agricultural sector rebounded strongly, recording a growth rate of 6.6 per cent year-on-year, and contributing 1.4 percentage points to GDP growth.

The sector accounted for 23.5 per cent of GDP at basic prices.

The strongest sub-sector was Fishing, which grew by 16.4 per cent year-on-year and 3.2 per cent quarter-on-quarter.

Crops, dominated cocoa, grew by 6.7 per cent. Cocoa alone expanded by 3.4 per cent, indicating recovery from weather and supply shocks that plagued recent harvests.

Livestock grew by 5.6 per cent, while Forestry and Logging contracted by 2.5 per cent, making it the only sub-sector in agriculture to shrink.

Industrial growth slows

The industrial sector, representing 29.7 per cent of GDP, posted a moderate growth rate of 3.4 per cent.

The standout performer was Manufacturing, which expanded by 6.6 per cent, supported by increased production and renewed demand.

However, the sector’s performance was tempered by a severe contraction in Oil and Gas, which shrank by 22.1 per cent due to falling crude oil output.

Overall, Mining and Quarrying still managed a positive growth of 1.4 per cent, buoyed by gold production.

Water Supply, Sewerage and Waste Management declined by 3.7 per cent, while Electricity and Construction posted modest gains of 2.8 per cent and 1.5 per cent, respectively.
Industry contributed 1.09 percentage points to the 5.3 per cent overall GDP growth.

Non-oil growth shows strong momentum

When oil and gas are excluded, Ghana’s economy grew by 6.8 per cent year-on-year in Q1 2025, significantly higher than the 4.3 per cent recorded in Q1 2024.

This suggests strong underlying momentum in non-oil sectors, particularly in domestic consumption and services.

Government, household spending

The GDP measured by the expenditure approach showed that the government’s final consumption expenditure rose sharply by 8.2 per cent, reflecting increased public spending.

Household Final Consumption also increased by four per cent, while Gross Capital Formation, a proxy for investment, grew marginally by 1.1 per cent.

However, Net Exports declined sharply, falling by over 72,323.1 per cent, due to a slump in export volumes relative to imports.

Final consumption by Non-Profit Institutions Serving Households (NPISH) also declined by 16.5 per cent, further dragging on the expenditure side.

Quarter-on-quarter growth improves

Seasonally adjusted data show a quarter-on-quarter GDP growth rate of 1.4 per cent for Q1 2025, up from 0.9 per cent in the last quarter of 2024.

Agriculture led the quarterly gains with a 1.7 per cent rise, followed by services (1.5 per cent) and industry (0.9 per cent).

This improvement suggests a stabilising growth trajectory following the macroeconomic adjustments and currency volatility that characterised the previous year.