US-Israel-Iran Conflict Dims Ghana’s 2026 Growth Outlook as Fitch Solutions Forecast Reduced GDP Growth
Fitch Solutions has revised down Ghana’s 2026 economic growth forecast, citing the impact of escalating geopolitical tensions in the Middle East, particularly the ongoing US-Israel-Iran conflict.
According to the research firm, Ghana’s real GDP is now projected to grow by 5.5 percent in 2026, down from an earlier forecast of 5.9 percent.
The downgrade follows the release of partial national accounts data by the Ghana Statistical Service (GSS) on March 17, which showed that real GDP growth accelerated to 5.8 percent year-on-year in the fourth quarter of 2025, up from 5.5 percent in the third quarter.
The improved Q4 performance was driven largely by the industrial sector, where growth picked up to 2.0 percent from 0.8 percent in the preceding quarter. Agricultural output, although still robust, slowed to 5.9 percent from 8.6 percent, while services sector growth moderated to 5.4 percent from 7.6 percent, marking its weakest expansion since the second quarter of 2024.
Based on the latest data, Fitch Solutions estimates that Ghana’s full-year GDP growth for 2025 reached 6.0 percent, the strongest outturn since 2019 and slightly above its earlier projection of 5.8 percent.
However, the firm noted that the stronger 2025 base, coupled with external shocks stemming from the Middle East conflict, has weighed on the 2026 outlook.
“The war in the Middle East and the effective closure of the Strait of Hormuz have dimmed Ghana’s near-term growth outlook,” Fitch Solutions stated.
The firm indicated that while Ghana’s fiscal and external positions are expected to remain relatively insulated—supported in part by elevated gold prices—the conflict is likely to exert upward pressure on inflation through higher energy costs.
Recent increases in petroleum prices, with major oil marketing companies raising pump prices by between 8 and 11 percent in early March, are expected to feed into transport costs and subsequently drive up food prices and utility expenses.
As a result, Fitch Solutions has revised its 2026 average inflation forecast upward to 7.8 percent, from a previous estimate of 7.3 percent, noting that this could weigh modestly on private consumption.
Despite these pressures, the firm expects the impact on growth to remain manageable, underpinned by supportive domestic factors.
It noted that cumulative monetary policy easing of 1,250 basis points since mid-2025 is likely to support increased credit uptake in 2026, even if the Bank of Ghana maintains its policy rate at 15.50 percent amid heightened global uncertainty.
Lower borrowing costs are expected to boost investment activity, particularly in gross fixed capital formation, while increased output in Ghana’s oil and gold sectors is projected to provide additional support to exports and overall economic growth.
Fitch Solutions maintained that its baseline scenario assumes the Middle East conflict will be relatively short-lived, with global energy prices expected to stabilise over the medium term.
