Ghana’s economy has started 2025 on a strong note, recording a 5.3% year-on-year growth in the first quarter, exceeding early projections and surpassing the 4.9% growth recorded in the same period last year.

This encouraging performance was revealed in a recent report by IC Research titled “Ghana’s Q1 2025 Real GDP Growth: Green Shoots in Tight Soil.”

The growth comes despite fiscal measures implemented to stabilize the economy, which many had feared might hamper expansion.

While initial forecasts for Ghana’s GDP growth in 2025 ranged between 4.5% and 4.8%, early data now suggest the country may outperform these estimates.

The report stated, “We foresee full-year 2025 overall growth likely exceeding our upper-band forecast of 4.8%.

However, we have opted to maintain our current forecast range of 3.8% to 4.8% as we await the extent of fiscal drag on the second quarter 2025 performance.”

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A significant driver behind this growth is the non-oil sector, which posted a robust 6.8% year-on-year increase in Q1, despite a contraction in the oil and gas sector during the same period.

The report highlights this as evidence of strong underlying momentum in the real economy, noting it “has significantly boosted our optimism about Ghana’s growth outlook for 2025, despite the downside risks posed by fiscal tightening.”

The agriculture sector also delivered an impressive performance, growing by 6.6% in the first quarter, largely propelled by a 6.7% increase in the high-weight crops sub-sector.

This growth contributed to a steady decline in annual food inflation since February 2025.

IC Research pointed out that “the impressive performance in the crops sector has yet to reflect the government’s ongoing investments in agriculture, which aim to support lower food inflation.”

Despite the positive start, IC Research remains cautious, highlighting the potential impact of continued fiscal constraints in the coming quarters.

For now, however, the solid Q1 figures offer hope that Ghana could close the year with GDP growth exceeding earlier expectations.

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Image Credit: SAT Reporter