World Bank cuts Ghana’s 2025 growth forecast to 3.9%

The World Bank has revised Ghana’s 2025 gross domestic product (GDP) growth projection downward to 3.9%, falling short of the government’s 4.4% target.

The updated forecast, published in the April 2025 edition of the Bretton Woods institution’s Africa’s Pulse report, reflects a modest reduction from the previous estimate of 4.3%.

The World Bank cited persistent inflationary pressures and ongoing external vulnerabilities as key reasons for the downgrade.

Despite the lower forecast, the Bank remains cautiously optimistic about Ghana’s medium-term prospects, projecting a rebound to 4.6% growth in 2026 and 4.8% in 2027.

The report also highlighted climate-related risks, particularly unpredictable weather patterns that have disrupted cocoa production in Ghana and Côte d’Ivoire—two of the world’s leading cocoa exporters.

It warned that climate-induced events such as floods and droughts continue to erode national budgets across Africa by up to 9%, causing economic setbacks of between 2% and 5%.

On a more positive note, Ghana is among a few African economies showing early signs of recovery in 2025.

High-frequency indicators, particularly the Purchasing Managers Index (PMI), suggest an uptick in business activity. Ghana’s PMI rose from 47.9 in January to 50.6 in March, indicating improved demand, easing supply bottlenecks, and renewed investor confidence following the December 2024 presidential elections.

“Business activity in Mozambique and Ghana rebounded in February 2025,” the World Bank observed.
“The modest uptick in Ghana was driven by increased demand and a resurgence in new business engagements.”

Across the region, Sub-Saharan Africa’s economic growth is expected to rise slightly from 3.3% in 2024 to 3.5% in 2025, with further acceleration to 4.3% by 2026–2027.

However, the continent’s overall trajectory remains constrained by weak performances in its three largest economies—Nigeria, South Africa, and Angola. Excluding these, the rest of Sub-Saharan Africa is projected to grow by 4.6% in 2025, rising to 5.7% by 2027.

Still, the World Bank warned that elevated downside risks—including global policy uncertainties, climate shocks, and fiscal constraints—pose ongoing threats to a sustained and inclusive recovery across the continent.