Fitch Solutions maintain 4.2% GDP growth for Ghana in 2025

Fitch Solutions has maintained its 2025 growth forecast for Ghana at 4.2 per cent, according to the BMI interim Ghana country risk report. The impact from global trade tensions is expected to be offset by the rise in gold prices, which will boost Ghana's export earnings. Mike Kruiniger, Associate Director BMI Country Risk for Sub-Saharan Africa at Fitch Solutions, shed light on the report during an interview on CNBC Africa. Ghana's economy showed significant growth of about 5.7% in 2024, surpassing expectations and marking a substantial increase from the 3.1% recorded in 2023. However, the forecast for 2025 anticipates a slower economic growth rate, with several key factors contributing to this adjustment. The removal of fiscal stimulus following the election in December, the plateauing of oil production gains, and tight credit conditions are the primary reasons cited for the projected slowdown. On the horizon, uncertainties remain regarding global trade tensions and oil market volatility. Despite these challenges, the price of gold is expected to strengthen, providing support to Ghana's reserves and currency stability. The surge in gold prices is set to enhance export earnings, bolster the current account surplus, and fortify international reserves. The Bank of Ghana is poised to leverage this situation to intervene in the foreign exchange market efficiently. The higher gold prices will also offer fiscal flexibility, reducing the country's reliance on IMF inflows. While the economic outlook benefits from the gold price surge, it also introduces potential policy risks, including decisions around tax reforms and controversial bills. As Ghana awaits the President's State of the Nation address, the focus shifts to reform momentum and the country's capacity to sustain positive trajectories. Despite being under an IMF program and meeting key objectives, Ghana faces risks amid the elevated gold prices. The nation's ability to expand reform momentum and navigate policy decisions will play a vital role in shaping its economic landscape. The dialogue with Fitch Solutions' Mike Kruiniger emphasized the significance of high gold prices, fiscal flexibility, and policy risks in Ghana's economic outlook for 2025.