Economy to remain on recovery path but growth projected at 3.6% in 2025 – Databank

Ghana’s economy is expected to remain on a recovery path, with real Gross Domestic Product (GDP) growth projected at 3.6% in 2025.

According to Databank Research, the services sector is expected to be the main driver of this expansion, while the cocoa subsector, despite lagging, is beginning to show promising signs of improvement.

In its 2025 Economic Outlook, it said real GDP growth in 2025 would ease steadily at 3.6% year-on-year based on building on the strong recovery seen in Ghana’s economy in 2024 and the transition to a new administration following the elections.

“While the new government’s plans may support long-term growth, the adjustment process and the efforts to consolidate the achievements of the previous administration may slow down policy implementation and sector activities in the short to medium term”. It noted.

It expressed cautious optimism for the industrial sector growth, tempered by energy debt and budget constraints.

According to Databank, although this growth in gold mining and the government’s project revitalisation have stimulated the sector, ongoing energy sector debt issues and anticipated budget constraints may impede growth in construction and manufacturing subsectors.

Meanwhile, it pointed out that Ghana’s Real GDP Growth would end 2024 at a median rate of 4.5%.

“Ghana’s economic growth in 2024 rebounded strongly from a downturn in 2023, largely driven by increased funding from the International Monetary Fund and World Bank, improving export and tax receipts, and easing inflation rate.”

“We note 2Q ’24 [quarter 2, 2024] growth came stronger than expected, with real GDP growth of 6.9% and non-oil growth at 7.0% for year-on-year, compared to 2.5% and 4.4% in 2Q  [second quarter of 2023, respectively. This growth was largely driven by the industrial and services sectors, which expanded by 9.3% and 5.8% year-on-year], respectively”, it stressed.

It continued that the increase in government spending, particularly ahead of the December elections, played a key role in supporting this growth.

However, the ongoing challenges in the cocoa sub-sector continued to impede growth in the agriculture sector.