Good times are on the horizon for Ghanaian pockets! A new report by UK-based Fitch Solutions reveals that a surge in household spending, fueled by a stable Cedi and easing inflation, is set to drive Ghana’s economic growth in 2025.
According to the research powerhouse, private consumption is projected to expand by a robust 4.0%, contributing a significant 3.2 percentage points to the nation’s overall Gross Domestic Product (GDP) growth.
This consumer-led revival is largely attributed to a welcome decline in inflationary pressures and a strengthening macroeconomic environment.
Fitch Solutions forecasts a significant drop in inflation, from an average of 22.9% in 2024 to a more manageable 18.8% in 2025.
This positive shift is backed by favorable international market trends and shrewd domestic policy interventions.
“We forecast that inflation will moderate from an average of 22.9% in 2024 to 18.8% in 2025, supported by lower global oil prices that will enable Ghana’s National Petroleum Authority to contain increases in, or even reduce, retail pump prices,” the report stated.
The anticipated dip in petroleum prices is expected to be a major relief for both households and businesses, slashing transportation and production costs across the board.
Beyond global oil dynamics, Fitch’s Agribusiness team foresees improved food supply chains further stabilizing the prices of essential food imports like wheat and rice – staples in every Ghanaian home that heavily influence the consumer price index.
“In addition, our Agribusiness team anticipates that improved supply will drive down the costs of foodstuffs that Ghana relies on – including wheat and rice – further helping to ease inflationary pressures,” Fitch added, bringing much-needed relief to consumers who have battled high food prices for years.
Adding to the good news, the Ghanaian Cedi is expected to remain stable, bolstered by soaring gold prices that will fortify the Bank of Ghana’s (BoG) reserves.
This stability will act as a crucial buffer against external shocks and curb imported inflation. “Moreover, elevated gold prices will bolster the Bank of Ghana (BoG)’s reserves, supporting the cedi and contributing to exchange rate stability, which will limit imported inflation,” Fitch noted.
A resilient Cedi means lower costs for a wide array of imported goods, from raw materials to finished products, easing the financial strain on ordinary Ghanaians and businesses alike.
With these positive inflationary and exchange rate trends, household consumption is firmly positioned to be the driving force behind Ghana’s economic growth in the coming quarters.
“Household consumption will remain the engine of economic growth in the coming quarters as inflationary pressures ease,” Fitch affirmed, predicting a rebound in consumer confidence as inflation cools, empowering households with greater purchasing power.
Fitch Solutions also pointed to the ongoing Extended Credit Facility (ECF) arrangement with the International Monetary Fund (IMF), set to conclude in May 2026. Historically, the end of such programs in Ghana has often led to a loosening of fiscal policy, potentially further stimulating domestic demand.
“Following the conclusion of the previous IMF programme in 2019, the budget deficit widened to 4.1% of GDP, from 3.4% in 2018. This contributed to an increase in total domestic demand growth from 5.7% to 7.3% over the same period.”
Should history repeat itself, the post-IMF era could see increased government spending to meet political and social demands, providing an additional boost to household and private sector consumption.
Looking further ahead, Fitch Solutions anticipates the disinflation trend to persist into 2026, with inflation forecast to average 15.2%, ensuring sustained consumer activity and economic momentum.
While potential fiscal slippages and external vulnerabilities remain on the horizon, Fitch’s outlook paints a cautiously optimistic picture for Ghana’s economic future, signaling a promising period for the nation’s economy.
