Fitch Solutions has maintained its earlier forecast that real economic growth in Ghana will decelerate from 5.5% in 2024 to 4.4% in 2025, as the new government pursues fiscal tightening.

Accordingly, it is projecting that the budget deficit will narrow from 5.9% of Gross Domestic Product in 2024 to 4.2% in 2025.

In its latest report on Ghana, the UK-based firm said “The provisional election results are in line with our prediction of Mahama winning the presidency and the NDC {National Democratic Congress] securing a parliamentary majority. The largely peaceful voting process and the apparent smooth transfer of power also matched our expectations”.

“As such, we maintain all our macroeconomic forecasts for Ghana: we continue to project that real economic growth will decelerate from 5.5% in 2024 to 4.4% in 2025, as the new government pursues fiscal tightening. Accordingly, we project”, it stated.

NDC to Maintain Broader Policy Continuity

Fitch Solutions continued that despite the opposition winning the election, Ghana will likely maintain broad policy continuity.

Furthermore, the NDC's comfortable parliamentary majority will allow it to diverge from some policies implemented by the NPP, such as removing certain taxes, including a levy on electronic payments. However, it stressed that the fiscal impact will be minimal since the taxes the NDC seeks to target generate less than 3.0% of total revenue.

“In fact, the NDC has committed to introducing alternative revenue-generating measures, including reducing tax exemptions and reviewing taxes on ports and the mining sector, in line with fiscal consolidation objectives under Ghana's IMF programme. Given Ghana's dependence on concessional financing for macroeconomic stability, we think that relations with the IMF [International Monetary Fund] will remain stable, despite Mahama’s earlier statements to revisit the deal”, it added.