Ghana: GDP growth improves in Q1
The economy starts the year on a stronger footing: GDP growth rose to 5.3% year on year in the first quarter of 2025, picking up from Q4’s 3.6% expansion. On a seasonally adjusted quarter-on-quarter basis, economic growth also gained momentum, expanding 1.4% in Q1, accelerating from 0.9% in the previous period.
Growth driven by public spending and cocoa, gold exports: Annual GDP growth rose on the back of upticks in household and government spending, along with stronger exports.
On the domestic front, household spending grew 4.0% year on year in Q1 (Q4 2024: +3.9% yoy), while public consumption surged to over two-year high of 8.2% (Q4 2024: +2.3% yoy). Meanwhile, total investment growth slowed sharply to 1.1% in Q1 (Q4 2024: +14.1% yoy), marking the worst reading since Q4 2023.
Externally, exports of goods and services jumped 13.9% in Q1 (Q4 2024: +2.7% yoy), as cocoa shipments surged and gold demand increased amid global uncertainty. Imports of goods and services also rose, growing 7.3% in Q1 (Q4 2024: +7.0% yoy).
GDP growth to soften this year: Our panelists see the economy growing at a slower pace in the coming quarters, with annual GDP growth coming in below 2024 levels in 2025 as a whole on a high base effect. Public spending and fixed investment growth are projected to slow in 2025 as a result of fiscal consolidation. Export growth is also set to soften, despite rising gold and oil output. More positively, private spending should grow at a faster clip. Meanwhile, recent debt restructuring measures should improve investor sentiment and unlock IMF funding, boding well for the economy. Adverse weather affecting the cocoa harvest poses a downside risk to GDP growth.