Ghana’s fiscal deficit is expected to end 2025 at 3.9% of Gross Domestic Product (GDP), higher than the 3.8% projected by the government.

According to IC Research, a leading economic research firm, the government’s commitment to sustain expenditure rationalisation measures in the second half of 2025, while driving revenue growth, will trigger this.

In its assessment of the 2025 Mid-Year Review Budget, it said the strong restraint on expenditure in the first half of 2025 has significantly eased its concerns about the near-term fiscal outlook, “Although we continue to view the payroll and energy sector obligations as lingering upside risk to the outlook.”

Despite the compression in the overall deficit target, the government surprisingly left the target primary surplus unchanged at 1.5% of GDP.

“Our analysis revealed that the unchanged fiscal anchor for 2025 reflects an unexpected upsurge in energy sector obligation by GH¢2.9bn to GH¢30.0bn for 2025 with 94.1% of the increase already paid in half-year 2025”.

“Our investigations revealed that while the Electricity Company of Ghana has broadly complied with the Cash Waterfall Mechanism in 5M2025, a GH¢103.4 million shortfall in January 2025 and a likely under-collection in the first half of 2025 contributed to the unplanned energy sector payment, it added.

This payment uncertainty in the energy sector, IC Research pointed out, keeps it cautious on the short-to-medium term fiscal outlook.

The government lowered its 2025 fiscal deficit target to 3.8% of GDP, down from 4.1%, in the Mid-Year Review Budget.

This was after a better-than-expected first six months of the year, its finance minister said on Thursday, pledging to get public finances back on track.