The Institute for Economic Research, Public and Policy (IERPP) has raised concerns about Ghana’s latest GDP figures, warning that the headline growth of 5.5% recorded in the third quarter of 2025 masks weakening underlying economic conditions and deepening structural vulnerabilities.

In a position paper released by the institute, led by Prof. Isaac Boadi of the University of Professional Studies, Accra (UPSA), the think tank argues that the economy is “expanding on the surface but losing momentum underneath,” pointing to slowing growth across key sectors and increasing exposure to external and domestic risks.

Ghana’s 5.5% growth in Q3 2025 marks a decline from the 7.0% posted in the same quarter of 2024. Seasonally adjusted quarterly growth also slipped from 1.6% to 1.3%, which the IERPP says signals weakening economic activity.

More concerning, the paper notes, is the slowdown in non-oil GDP—from 7.8% to 6.8%—indicating that the deceleration is broader than the extractive sector alone.

The GDP deflator also dropped sharply from 27.2% to 11.1%, suggesting that previous nominal gains were heavily influenced by inflation rather than productivity improvements.

The industrial sector posted the sharpest slowdown, collapsing from 11.4% growth last year to just 0.8% in Q3 2025. Mining and quarrying contracted by 2.8%, while oil and gas shrank by 18.2%, wiping out nearly a full percentage point from overall GDP growth.

“These developments underscore Ghana’s vulnerability to commodity price swings, operational disruptions and external shocks,” the report warns.

The services sector remains the dominant driver of national output, contributing roughly 3.25 percentage points of the 5.5% overall growth.

However, IERPP notes that this expansion is dominated by a limited number of fast-growing subsectors—Trade (10%), ICT (17%) and Transport and Storage (10.4%).

Meanwhile, labour-intensive services such as Health and Social Work (-9.7%) and Accommodation and Food Services (-7.2%) are shrinking, undermining job creation and limiting inclusive growth.

Agriculture expanded by 8.6% in the quarter, contributing 1.65 percentage points to total GDP. But the institute cautions that the sector remains highly seasonal and weather-dependent, restricting its ability to serve as a long-term stabilizing force.

The paper also flags volatility in economic activity indicators. Shifts in the Monthly Index of Economic Activity—such as the jump from 3.7% to 5.7% in July alone—raise concerns about the consistency of current estimates.

According to IERPP, “the evidence points to an economy that appears to be growing, but with declining momentum and increasing structural imbalances.”

To address the emerging risks, the institute is calling for targeted reforms to strengthen resilience and broaden the sources of growth. These include:

• Diversifying the industrial base, with a focus on manufacturing, agro-processing and MSMEs
• Expanding digital economy participation
• Managing oil revenue volatility through improved fiscal buffers and counterfactual planning
• Improving data credibility by harmonizing the Monthly Index of Economic Activity and quarterly national accounts, and incorporating confidence intervals

Summarising the institute’s findings, Prof. Boadi stressed that the current growth profile is unsustainable without significant reforms.

“Ghana’s Q3 2025 GDP shows growth that is slowing and structurally fragile, driven mainly by a narrow set of service activities while oil and gas continue to weigh down industry,” he noted.

“Building a resilient and more diversified economy will require targeted industrial reforms, job-rich sector support, better data accuracy and proactive management of extractive-sector risks.”

The IERPP is urging government and policymakers to treat the latest GDP numbers as a warning signal and to act swiftly to safeguard Ghana’s medium-term economic prospects.

Below is the full position paper

Ghana's Q3-2025 GDP Results: An IERPP Position Paper

This critical evaluation of Ghana's Q3-2025 GDP performance is presented by the Institute for Economic Research, Public and Policy (IERPP) to identify the main risks, structural flaws, and policy measures required to stabilize and strengthen the economy. The underlying indicators show slowing momentum, growing fragility, and significant exposures that need immediate attention, despite the headline numbers showing an expanding economy.

In Q3 2025, Ghana's economy expanded by 5.5 percent year over year, compared to 7.0 percent in the same quarter of 2024. The seasonally adjusted quarterly growth rate, which dropped from 1.6 percent to 1.3 percent, indicating weaker underlying activity, is another indication of the slowdown. The slowdown in non-oil GDP growth, which dropped from 7.8 percent to 6.8 percent, is more worrisome since it shows that the slowdown is not limited to extractives. Additionally, the GDP deflator fell precipitously from 27.2 percent to 11.1 percent, suggesting that price effects rather than real productivity gains drove earlier nominal gains.

The industrial sector, which saw a sharp decline from 11.4 percent to 0.8 percent year over year, is the main source of growth drag. Together, mining and quarrying shrank by 2.8 percent and oil and gas shrank by 18.2 percent, eliminating almost one percentage point from overall GDP growth. These events highlight Ghana's susceptibility to operational disruptions, volatility in the extractive sector, and changes in the price of commodities globally. The GDP is still being driven by the services sector, which accounts for about 3.25 percentage points of the overall 5.5 percent growth. Nevertheless, this growth is still limited and concentrated in a few high-performing subsectors, including Trade (10.0%), ICT (17.0%), and Transport and Storage (10.4%). In the meantime, vital labor-intensive services like Health and Social Work (−9.7%) and Accommodation and Food Services (−7.2%) are declining, undermining job creation and restricting growth's inclusivity.

Despite a strong 8.6 percent growth, agriculture's share of the total GDP is still only 1.65 percentage points. The sector's reliability as a steady growth anchor is limited by its highly seasonal and weather-dependent gains. The seasonally adjusted quarterly figures, which show current growth of 1.3 percent below recent averages of 1.4 to 1.6 percent, further demonstrate the loss of economic momentum. Furthermore, significant changes to the Monthly Index of Economic Activity, like the change from 3.7 percent to 5.7 percent in July, demonstrate ongoing data volatility and raise the possibility that current estimates are erratic. The data and accompanying charts offer strong visual proof of structural imbalances and a slowing economy. A picture of an economy growing on the surface but losing steam underneath is painted by the decline in year-over-year GDP growth, the heavy reliance on a small number of service industries, the sharp contraction in oil and gas, and the waning quarterly momentum.

ERPP urges targeted reforms to strengthen Ghana’s growth and resilience. It recommends diversifying the industrial base, supporting manufacturing, agro-processing, and MSMEs, and broadening participation in the digital economy. Policymakers should manage oil volatility through counterfactual planning and stronger fiscal buffers, while improving data reliability by integrating confidence intervals and harmonizing MIEG and QNA.

Ghana’s Q3-2025 GDP shows growth that is slowing and structurally fragile, driven mainly by a narrow set of service activities while oil and gas continue to weigh down industry. Building a resilient and more diversified economy will require focused industrial reforms, job-rich sector support, better data accuracy, and proactive management of extractive-sector risks.

Author:
Prof. Isaac Boadi
Dean, Faculty of Accounting and Finance, UPSA
Executive Director, Institute of Economic and Research Policy, IERPP