Ghana’s economic momentum ahead of 2025 mid-year budget review

A budget review marked by strong economic signals

As the government prepares to present the 2025 Mid-Year Budget Review today, the latest economic indicators suggest that Ghana’s economy is rebounding faster and stronger than many anticipated. With significant improvements across growth, inflation, trade, and currency stability, the country appears to be charting a confident course toward recovery and resilience.

GDP Growth: A Steady Climb

Ghana’s Real GDP growth in the first quarter of 2025 clocked in at 5.3%, up from 4.9% in Q1 2024. While this 0.4 percentage point increase might seem modest at first glance, it reflects growing momentum in core sectors such as agriculture and manufacturing — both vital for inclusive economic growth.

Agriculture and Manufacturing: Engines of Expansion

Perhaps the most striking improvement comes from the agriculture and manufacturing sectors:

• Agriculture saw a significant leap, growing by 6.6% in Q1 2025 compared to just 2.4% in Q1 2024. This rebound may reflect favorable weather, policy interventions, or increased investment in agri-businesses.
• Manufacturing, often seen as the backbone of industrialization, mirrored this trend with growth rising from 1.9% to 6.6% year-on-year — a more than threefold improvement.

These figures suggest not only recovery but real structural gains in sectors that provide jobs and economic linkages across the country.

Inflation Tamed, Prices Stabilizing

One of the most promising signs is the dramatic cooling of inflation:

• Headline inflation has dropped to 13.7% mid-year, down from 23.8% at the end of 2024.
• The Producer Price Index, a forward-looking indicator of input costs, also fell sharply to 5.9% from 26.1%.

This steep decline in inflationary pressure indicates that price stability is gradually being restored — a critical condition for consumer confidence and private sector investment.

External Sector: Trade and Reserves Surge

Ghana’s external balances have shown remarkable improvement:

• The trade surplus for the first half of 2025 surged to $5.6 billion, quadrupling from $1.4 billion in the same period in 2024.
• The current account surplus climbed to $3.4 billion, a vast improvement from $283.1 million last year.

Such gains reflect stronger exports, possibly due to higher commodity prices or increased non-traditional exports, as well as improved remittance inflows and reduced import bills.

Currency Stabilization: The Cedi Bounces Back

The Ghanaian cedi has seen a notable appreciation, with the exchange rate improving from GH¢14.70 per dollar at end-2024 to GH¢10.45 mid-2025. This kind of currency strengthening is rare in developing economies and often points to strong reserves, balanced trade flows, and improved investor confidence.

In fact, Gross International Reserves have risen to $11.1 billion, offering 4.8 months of import cover, compared to $8.9 billion and 4 months at the end of 2024.

A Cautiously Optimistic Outlook

While challenges such as debt sustainability, youth unemployment, and global uncertainty persist, these numbers give the government greater fiscal space and credibility as it heads into the Mid-Year Budget Review. There is clear evidence that policies aimed at stabilizing the macroeconomy are beginning to bear fruit.

The message is clear: Ghana is on a sound footing and moving in the right direction. Policymakers and citizens alike will be watching closely to see how this progress can be consolidated in the months ahead.

Data Sources: Bank of Ghana & Ghana Statistical Service