Ghana’s Fiscal Deficit Projected to Narrow to 4–6% of GDP by H1 2025
Ghana’s fiscal deficit is projected to narrow to between 4% and 6% of Gross Domestic Product (GDP) by the first half of 2025, according to the latest fiscal update from Databank Research.
The anticipated improvement in the country’s fiscal position is expected to be driven by delays in arrears clearance and enhanced financial support from the International Monetary Fund (IMF), particularly the expected disbursement of US$370 million under the Extended Credit Facility (ECF) programme.
“With a strong start in revenue mobilisation and targeted CAPEX [capital expenditure] cuts, we believe the primary balance will improve from the 3.9% deficit recorded in 2024,” Databank Research stated in its update. “By allocating GH¢13 billion towards arrears clearance against a GH¢67 billion backlog, we see sufficient fiscal space to narrow the overall deficit from 7.9% of GDP.”
The research firm further highlighted the role of fiscal discipline measures, especially at the sub-national level, in achieving the tighter deficit target. “We also believe that effective implementation of the Commitment Control and Compliance League Table for Metropolitan, Municipal and District Assemblies (MMDAs) will play a key role in enforcing fiscal discipline and supporting tighter deficit targets,” it added.
In its assessment of Ghana’s external position, Databank maintained a favourable short-term outlook, citing sustained current account surpluses and the full operationalisation of GOLDBOD as key stabilising factors.
“With improved reserve buffers and the anticipated GH¢370 million ECF disbursement, we project gross international reserves to exceed GH¢10 billion by mid-year, driven by strong gold, cash crops, and remittance inflows,” the report noted.
Databank also pointed to resilient external activity, bolstered by expanding trade agreements with the United Arab Emirates, China, and Switzerland. Limited exposure to US markets was identified as a mitigating factor against global trade volatility.
“Overall, we maintain a positive Q2 2025 outlook, reinforced by growing intercontinental trade and improving capital account flows,” the report concluded.
The projections come amid ongoing fiscal consolidation efforts by the government under the IMF-supported economic reform programme aimed at restoring macroeconomic stability and ensuring debt sustainability.
