The World Bank has lowered its 2025 economic growth forecast for Ghana to 3.9%, a downward revision from its earlier projection of 4.3% and below the Ghanaian government’s 4.4% target.

The updated outlook, released in the Bretton Woods institution’s April edition of Africa’s Pulse, cites persistent inflationary pressures and external vulnerabilities as the primary drivers of the more cautious estimate. The Bank, however, remains moderately optimistic about the country’s medium-term prospects, projecting GDP growth to rebound to 4.6% in 2026 and 4.8% in 2027.

Despite the near-term headwinds, Ghana is showing early signs of economic recovery, buoyed by improving business sentiment. The country’s Purchasing Managers Index—a closely watched gauge of private-sector activity—climbed from 47.9 in January to 50.6 in March, signaling a return to expansion territory. The World Bank attributes this momentum to easing supply chain pressures and renewed investor confidence following the December 2024 elections.

Still, downside risks loom. The report underscores climate-related challenges, including erratic weather patterns that have disrupted cocoa production in Ghana and neighboring Côte d’Ivoire, both major global suppliers. Across the region, climate-induced events such as floods and droughts have strained national budgets and shaved off as much as 5% from GDP in some African economies.

Regionally, Sub-Saharan Africa’s growth is expected to rise modestly—from 3.3% in 2024 to 3.5% in 2025—with acceleration to 4.3% by 2027. However, the continent’s economic trajectory remains dampened by sluggish performances in Nigeria, South Africa, and Angola. Excluding these economies, the rest of the region is forecast to grow by 4.6% in 2025 and 5.7% by 2027.

The World Bank cautioned that global monetary policy shifts, fiscal constraints, and ongoing climate volatility remain key threats to the region’s recovery.

Source:TheDotNews