AfDB projects Ghana’s GDP growth to hit 4.5% in 2025

The African Development Bank (AfDB) is projecting that Ghana’s economy will grow by 4.5% by the end of 2025, according to its African Economic Outlook report released on the sidelines of the AfDB Annual Meetings in Abidjan, Côte d’Ivoire.

The report provides a comprehensive outlook on key economic indicators for member countries, including GDP growth, inflation, revenue, expenditure, fiscal deficit, and debt-to-GDP ratios.

It also highlights potential threats to economic stability in Ghana and the broader West African region.

According to the AfDB, Ghana’s projected growth in 2025 will be driven by strong activity in the mining sector, reduced fiscal deficit due to ongoing consolidation efforts, and higher interest rates.

The Bank further projects that GDP growth will rise to 4.8% in 2026.

Comparisons with Other Forecasts
Ghana’s own projections are slightly more conservative. Finance Minister Dr. Ato Forson, in the 2025 budget, forecasted an overall GDP growth rate of 4.0%, with non-oil GDP growth expected to reach at least 4.8%.

The World Bank, in its Africa’s Pulse Report (April 2025), estimates Ghana’s growth at 3.9% for 2025, rising to 4.6% in 2026 and 4.8% in 2027.

However, the Bank also warned about the impact of climate variability, especially on cocoa harvests and prices in Ghana and Côte d’Ivoire, which could dampen growth prospects.

The IMF, in its Regional Economic Outlook released during the Spring Meetings in Washington D.C., revised Ghana’s 2025 growth forecast to 4.0%, in line with the government’s projection.

The IMF also projects 4.8% growth in 2026.

Inflation Outlook
The AfDB, however, does not share the government’s optimism on inflation. While the Ministry of Finance expects end-year inflation to fall to 11.9% in 2025, and the Bank of Ghana forecasts 12%, the AfDB projects a higher rate of 15.4%.

This would be a decline from April 2025’s inflation rate of 21%, but still significantly above government targets.

The IMF projects inflation at 17.5% for 2025, suggesting a likely miss of the government’s inflation target.

Nonetheless, the AfDB is optimistic about 2026, projecting that Ghana could return to single-digit inflation, forecasting 9% by the end of that year.

This would be supported by tight monetary policy, a stable exchange rate, and lower food prices.

Fiscal and External Indicators
The AfDB projects that:

• Ghana’s fiscal deficit will narrow to 3.5% of GDP in 2025, and 3.0% in 2026, supported by continued fiscal consolidation and strengthened public financial management.
  
• The debt-to-GDP ratio is expected to fall to 66.4% in 2025, aided by progress in debt restructuring and improved revenue mobilisation.
  
• The current account balance is projected at 2.6% of GDP in 2025, and 1.4% in 2026, bolstered by higher oil and gold exports.
  

Despite the positive outlook, the AfDB cautioned that climate change, policy reversals, and the direct and indirect effects of U.S. tariff hikes pose downside risks.

The Bank emphasised that maintaining the fiscal consolidation path will be key to mitigating these risks