All things being equal, Ghana’s economy is projected to expand by 4.3% in 2025, according to the World Bank estimation as contained in the October 2025 edition of Africa’s Pulse Report, released by the Bank in Washington, D.C.
The projection is about 0.4% more than its earlier projection of 3.9%, showing a renewed optimism about the country’s recovery trajectory.
The WB’s revised projection is 0.1% lower than the 4.4% projection by the Government of Ghana as captured in the 2025 Budget.
Already, Ghana’s economy has expanded by 6.3% in the second quarter of 2025, influenced by the services sector, which grew by 9.9% and contributed the most to GDP.
The World Bank projects growth to strengthen further to 4.6% in 2026 and 4.8% in 2027, underscoring a positive medium-term outlook.
Across the continent, Sub-Saharan Africa’s economy is expected to grow by 3.8% in 2025, up from 3.5% in 2024.
The Bank attributed the rebound to easing inflationary pressures and a modest recovery in investment, despite persistent global headwinds.
It noted that the number of African countries with double-digit inflation has dropped sharply—from 23 in October 2022 to 10 in July 2025—reflecting progress in price stabilization.
However, the report cautioned that downside risks remain, including trade policy uncertainty, weak investor sentiment, and shrinking access to external finance and aid.
The World Bank expects Ghana’s inflation to close 2025 at 15.4%, a projection that contrasts with the official rate of 9.4% in September 2025, down from 21.5% a year earlier.
The Bank’s forecast appears conservative, given the country’s recent disinflation trend.
Nonetheless, the report expressed optimism that inflation will continue easing, dropping to 9.4% in 2026.
The Bank of Ghana, in its latest Monetary Policy Report, reaffirmed expectations for inflation to remain within the single-digit range by year-end.
Ghana has spent 40 out of its 68 years since attaining political independence under International Monetary Fund (IMF) programmes, the World Bank has revealed in its 2025 Policy Notes titled “Transforming Ghana in a Generation”.
The nation has entered 17 IMF programmes over that period.
According to the report, without reforms, growth would plateau at around 3.8%, delaying the attainment of upper-middle-income status beyond 2050.
It emphasised that governance challenges persist in obstructing policy reforms and structural transformation, highlighting that persistent fiscal indiscipline, inefficiencies, and mismanagement continue to erode trust.
It warned that heavy reliance on natural resources have limited structural transformation and productivity gains.
Ghana at a Pivotal Moment
The report mentioned that “The real risk is complacency and business-as-usual.”
It warned of growth stagnation (3.8%) and delayed Universal Middle Income Status (UMIC) status if reforms stall.
The risks are: insufficient (quality) job creation, high poverty, widening regional gaps, fiscal fragility and environmental degradation.
The report added that the next four years offer a unique opportunity to break from past practices and strengthen the social contract, adding that elections create a unique opportunity to reset and rebuild the social contract.
However, the 2022 crisis exposed deep structural vulnerabilities, not just external shocks.
The World Bank continued that remarkable progress in the first decade of the century by Ghana was followed by a lost decade, culminating in the 2022 macroeconomic crisis.
It stated that Ghana’s income per capita is around US$2,200, and has largely stagnated over the past decade.
As part of its mandate in helping to shape the economic direction for growth of member nations, the World Bank has advised Ghana’s government to lean more on concessional external financing from institutions such as the International Development Association (IDA) rather than depending heavily on expensive domestic borrowing to finance capital projects.
It asserts that, concessional IDA loans provide far more favourable terms than domestic Treasury-bill borrowing.
Comparatively, using the short-term domestic financing market (T-bills), government’s financing cost an average interest rate of 27.4% between 2023 and 2024, while IDA regular and blended financing attracted interest and service fees between 0.75% and 2.0%, coupled with extended grace periods.
“Even with recent declines in average domestic borrowing costs to 11.9% in September 2025, new IDA blend terms offer significantly lower rates at 1.5%, locked in for longer periods”, the Country Director for Ghana, Sierra Leone, and Liberia, Robert Taliercio, emphasised while speaking at the launch of the World Bank’s 2025 Policy Notes in Accra, last week.
“So it’s an obvious choice in terms of using all IDA available before resorting to further domestic financing.”
The 2025 Policy Notes outline Ghana’s structural challenges and recommend four strategic foundations for long-term growth and inclusive transformation.
Most urgently it calls for restoring macro-financial stability through stronger domestic revenue mobilisation, sustainable public finances, and reforms in sectors such as energy and cocoa.
Ghana’s tax mobilisation, at 13% of GDP in 2021, remains well below both its estimated tax potential of 21% and the Sub-Saharan African average.
In the first half of 2025, revenue reached 7.1% of GDP against a 7.3% target.
Consequently, the World Bank has outlined a new set of policy recommendations aimed at helping Ghana achieve long-term economic transformation, with a clear warning that urgent reforms are needed to secure sustainable growth and job creation.
Despite Ghana’s significant progress made in the past in ensuring just economic development, cutting poverty in half between 1991 and 2016 and recording average growth of 6.8% between 2009 and 2019, in recent years, rising macroeconomic challenges – capped by a severe crisis which erupted in 2022 – have stalled progress.
World Bank data indicates that, between 2012 and 2023, only 250,000 net jobs were created, mostly in low-productivity sectors.
The World Bank has warned that without urgent reforms, fiscal pressures will deepen. For example, energy sector shortfalls cost the government US$1.4 billion in 2024, and are projected to reach US$2 billion by 2026 — funds that could otherwise support health, education, or infrastructure.
Base on this factors, the World Bank in the 2025 Policy Notes outline four key pillars for transformation:
1. Restore and sustain macro-financial stability by boosting domestic revenue mobilization, tackling fiscal stress, and advancing reforms in the energy and cocoa sectors.
2. Raise productivity and competitiveness through investments in skills, health, and private sector growth, while reducing bottlenecks such as long business registration times and slow court processes.
3. Sustain natural resource management and resilience with investments in climate-smart agriculture, agribusiness, and resilient infrastructure to diversify growth.
4. Strengthen governance and public institutions to rebuild citizen trust and ensure the reforms are effectively implemented.
However, Mr Taliercio notes that, with ambitious reforms Ghana could triple per capita income by 2050 and move decisively toward upper-middle-income status, adding that, flagship government initiatives such as the 24-Hour Economy and the Big Push could catalyze these reforms if executed effectively. “The choices Ghana makes now can unlock a generation of inclusive, resilient growth,” he said.
The World Bank pledged its continued support, calling for stronger collaboration between government, the private sector, civil society, and international partners to drive the country’s transformation agenda.
The World Bank has disbursed US$360 million from its International Development Association (IDA) for Ghana.
The disbursement is coming under the Second Resilient Recovery Development Policy Financing operation, to support the Government of Ghana’s efforts to restore macroeconomic stability and reinforce the foundations for more sustainable and resilient economic growth for job creation.
This was after the World Bank board approved the facility in June 2025, which was later ratified by Ghana’s parliament in July, 2025.
Details of the financial support
The disbursement was done on 11 September, 2025.
The disbursement coming under the Second Resilient Recovery Development Policy Operation is part of a broad World Bank engagement for crisis response and resilience in Ghana.
It is also expected to support the country’s post-crisis economic recovery and long-term resilience.
Its objectives are to:
1) Restore fiscal sustainability;
2) Support financial sector stability and private sector development;
3) Improve energy sector financial discipline; and
4) Strengthen social and climate resilience.
Other areas of support
According to the World Bank, the specific reforms supported by the programme will promote fiscal discipline and greater domestic revenue mobilisation, enhance the stability of the financial sector and promote private investment for private-sector-led growth.
It will also support measures to improve the financial sustainability of the energy sector, ensuring efficient management and operations.
Additionally, the programme will invest in reforms to bolster social resilience and integrate climate-related considerations into public policy, fostering sustainable development.
The Finance Committee report on July 2, 2025, stated that the loan forms part of a World Bank support package to Ghana, which also includes investment lending and technical assistance.
It complements earlier budgetary support under the first Resilient Recovery DPF and is designed to reinforce ongoing reforms under Ghana’s IMF programme.
The World Bank’s 9th Economic Update for Ghana titled Addressing Labor Market Challenges and Opportunities in Ghana’s Economic Landscape notes Ghana’s economy displayed resilience with strong growth of 5.7 percent in 2024 and continued growth in the first quarter of 2025 of 5.3 percent.
The Update also highlights Ghana’s notable progress towards completing its debt restructuring, subsiding inflation, and strong reserve accumulation supported by robust trade performance.
Notwithstanding, fiscal challenges emerged in 2024, which undermined previous fiscal stabilization gains. These also underscore the need for renewed efforts to implement structural reforms aimed at reinforcing fiscal discipline and macroeconomic stability.
The report anticipates that GDP growth will moderate to 3.9 percent in 2025 due to the impact of fiscal adjustments on domestic demand, persistent inflation which is higher than the single digit target, and high interest rates, before gradually returning to a projected level of 5 percent over the medium term.
The report emphasizes that significant risks could undermine Ghana’s macroeconomic stability and growth prospects. These include delays in completing external debt restructuring and challenges in fiscal consolidation, compounded by global factors such as international conflict escalations and commodity price volatility.
Domestically, inflationary pressures and exchange rate volatility pose threats, along with potential losses from state-owned enterprises (SOEs) and lower agricultural output due to climate shocks. The report notes that effectively managing election-related extra budgetary in future elections will be crucial in maintaining fiscal sustainability.
“Ghana’s success will depend on maintaining reform momentum and steadfast implementation. Entrenching fiscal discipline, strengthening public financial management, and carefully managing inflation and exchange rate volatility will be key. Energy sector reform, including through private sector participation, is urgent to improve management effectiveness and the collection of energy revenues” said Robert Taliercio,
Division Director for Ghana, Liberia and Sierra Leone. “These reforms are needed to restore macro-financial stability to support economic transformation and sustainable growth for jobs.”
The report underscores the need for structural reforms to support a private-led growth and job creation for Ghana’s growing population.
This means improving the business environment, closing infrastructure gaps, and accelerating the digital economy and climate adaptation. It notes the importance of addressing energy and cocoa sector challenges to mitigate fiscal risks and bolster economic stability.
Building human capital and enhancing the efficiency of service delivery are key to creating a productive labor force.
Ghana’s working-age population is projected to increase
significantly over the next decade, presenting a major opportunity for economic growth if the expanding labor force can be absorbed into productive employment.
Under this special topic, Addressing Labor Market Challenges and Opportunities, the report underlines the importance of developing a comprehensive strategy on job creation, structural transformation, and skill development.
The International Police (Interpol) has estimated that, the cost of cybercrime across Africa is in excess of US$4.0 billion annually.
This is evident locally as the Bank of Ghana reports indicates that, in 2022, Ghana recorded over 21,000 cyber fraud attempts in the financial sector, most targeting digital platforms.
First Deputy Governor of the Bank of Ghana, Dr. Zakari Mumuni has posited that, cybercrime is not a distant risk; it is a present danger, recalling that, in 2018, the bank issued one of the continent’s earliest Cyber and Information Security Directives for financial institutions, mandating risk-based frameworks, incident response protocols, and regulatory reporting.
“This reality underscores a simple truth: financial inclusion without system integrity is unsustainable. Cybersecurity is no longer an IT issue, it is a strategic imperative at the core of financial governance”, Dr Mumuni, said.
“Public trust, institutional confidence, and systemic stability now hinge on our ability to anticipate, withstand, and respond to cyber risks,” he said at the 14th AFI leaders’ roundtable discussion on the theme “Strengthening cyber resilience in digital financial services in Africa.”
Dr. Zakari noted that the Central Bank has long recognised this imperative.
“Today, over 40 financial institutions are integrated into our Financial Industry Security Operations Centre (FINSOC), enabling real-time threat detection and response,” he said.
The BoG conducts annual cybersecurity maturity assessments, using international frameworks like NIST and COBIT-5, to inform supervisory action and identify systemic gaps. In 2024, over 40% of assessed entities showed critical vulnerabilities particularly in access control and incident response.
“We are addressing these gaps with targeted interventions. Critically, we are not acting alone. We continue to work closely with Ghana’s Cyber Security Authority, the World Bank, INTERPOL, and the Africa Cybersecurity Resource Centre to bolster expertise and coordinate responses at scale,” he said.
To demonstrate this commitment, he recalled that in 2023, Ghana joined the African Development Bank’s AFAWA initiative, supporting financial institutions to unlock credit for women entrepreneurs through risk-sharing instruments and technical assistance.
Even more significantly, he said, under the leadership of President John Dramani Mahama, Ghana is establishing a Women’s Development Bank, with seed capital of GHc 51.3 million allocated in the 2025 budget.
“This institution will directly address the persistent credit gap faced by women-led businesses particularly in agriculture, trade, and tech,” Dr Mumuni said.
He added that these initiatives reflect our belief that women’s financial inclusion is not a social obligation, but a smart economic strategy.
“The digital financial future we envision is rich with promise, but that promise will only be realized if it is anchored in systems that are trusted, inclusive, and secure.
“The work we’ve done this week, the insights shared, the tools exchanged, the partnerships renewed, are powerful signals of what is possible when we lead together. I am confident that we have the will and the wisdom to build a resilient financial future for all Africans,” he said.
The World Bank Board of Executive Directors today approved $360 million from the International Development Association (IDA) for the Second Resilient Recovery Development Policy Financing operation to support the Government of Ghana’s efforts to restore macroeconomic stability and reinforce the foundations for more sustainable and resilient economic growth for job creation.
“The successful implementation of reform actions under the IMF program and the Development Policy Operations
series (DPO) has strengthened macroeconomic stability, restored investor confidence, and laid a solid foundation for sustained economic recovery and inclusive growth. We are confident that the measures supported by this DPO will help our efforts to enhance fiscal discipline and build a more resilient and inclusive economy, capable of withstanding future shocks,” said Honorable Cassiel Ato Forson, Minister of Finance.
The Second Resilient Recovery Development Policy Operation is part of a broad World Bank engagement for crisis response and resilience in Ghana. Its objectives are to: 1) restore fiscal sustainability; 2) support financial sector stability and private sector development; 3) improve energy sector
financial discipline; and 4) strengthen social and climate resilience.
“Entrenching fiscal and debt sustainability, improving the business environment to attract investment and create jobs, addressing the long-rooted energy sector challenges, and protecting the most vulnerable – measures supported by this financing – continue to be urgent priorities for Ghana. They are essential steps for the country to revitalize its domestic private sector, build resilience against climate change, and improve the quality of life of its people. We look forward to continuing to support Ghana to accelerate and deepen these reforms going forward.” said Robert Taliercio, Division Director for Ghana, Liberia and Sierra Leone.
The specific reforms supported by the program will promote fiscal discipline and greater domestic revenue mobilization, enhance the stability of the financial sector and promote private investment for a private-sector-led growth. It will also support measures to improve the financial sustainability of the energy sector, ensuring efficient management and operations. Additionally, the program will invest in reforms to bolster social resilience and integrate climate-related considerations into public policy, fostering sustainable development.
Economic institutions revise Ghana’s 2025 growth forecast, with gold exports playing a stabilizing role amid global uncertainty.
Adnan Adams Mohammed
Within the past two-weeks, Fitch Solutions and World Bank, both having globally respected economic views have released separate revised projections of Ghana’s economic growth projection for this year.
Fitch Solutions, last week, reaffirmed its projection that Ghana’s Gross Domestic Product, a measure of Ghana’s total economic output, will grow by 4.2% in 2025. This projection is 0.3% higher than the World Bank’s revised projection of 3.9%.
Ftich’s projection also slightly exceeds the International Monetary Fund’s forecast of 4%, but is far lower than Standard Bank’s projection of 5.4%, the highest growth rate projection so far for Ghana in 2025. The African Development Bank Group meanwhile has projected a 4.3% growth.
The UK-based research and sovereign ratings firm attributes its upbeat outlook to historically high gold prices, which are expected to cushion the Ghanaian economy against a global slowdown triggered by rising tariffs.
“Higher gold prices are anticipated to strengthen government revenue, enhance foreign exchange earnings, and help sustain currency stability”, Fitch said in its latest report.
The report also points out that Ghana is relatively less vulnerable to increasing trade restrictions from the United States, given that its primary exports—gold and crude oil—are not directly affected by the tariffs introduced by President Trump’s administration.
Moreover, the US constitutes only about 4% to 5% of Ghana’s total exports. In contrast, Ghana’s trade relations are more heavily oriented toward China and European countries, particularly Switzerland and the Netherlands.
While acknowledging potential risks from broader global economic headwinds, Fitch Solutions believes the anticipated gains from gold exports will likely offset these challenges by bolstering international reserves and supporting exchange rate stability through central bank interventions.
Fitch’s report on Ghana’s economic growth projection comes a week after the World Bank Group revised its projection downwards by 0.4 percent to 3.9% from its earlier projection of 4.3%.
The Bretton Woods institution explained that; persistent inflationary pressures and ongoing external vulnerabilities are key reasons for the downgrade. Highlighting climate-related risks (particularly, unpredictable weather patterns that have disrupted cocoa production in Ghana), it also warned that, climate-induced events such as floods and droughts continue to erode national budgets across Africa by up to 9%, causing economic setbacks of between 2% and 5% as contained in the April 2025 edition of its Africa’s Pulse report.
In the medium-term, the World Bank remains cautiously optimistic about Ghana’s prospects, projecting a rebound to 4.6% growth in 2026 and 4.8% in 2027. It rates Ghana among a few African economies showing early signs of recovery in 2025.
“Business activity in Mozambique and Ghana rebounded in February 2025,” the Group noted in the new report published last week. “The modest uptick in Ghana was driven by increased demand and a resurgence in new business engagements.”
High-frequency indicators, particularly the Purchasing Managers Index (PMI), suggest an uptick in business activity. Ghana’s PMI rose from 47.9 in January to 50.6 in March, indicating improved demand, easing supply bottlenecks, and renewed investor confidence following the December 2024 presidential elections.
Across the region, Sub-Saharan Africa’s economic growth is expected to rise slightly from 3.3% in 2024 to 3.5% in 2025, with further acceleration to 4.3% by 2026–2027.
However, the continent’s overall trajectory remains constrained by weak performances in its three largest economies—Nigeria, South Africa, and Angola. Excluding these, the rest of Sub-Saharan Africa is projected to grow by 4.6% in 2025, rising to 5.7% by 2027.
Still, the World Bank warned that elevated downside risks—including global policy uncertainties, climate shocks, and fiscal constraints—pose ongoing threats to a sustained and inclusive recovery across the continent.
In related news, the International Monetary Fund (IMF) sharply cut its global growth forecast 2.8% in 2025, a significant drop from the 3.3% forecast made in January as contained in the published IMF’s April 2025 World Economic Outlook (WEO), which cites escalating trade tensions with the United States announcing a wave of new tariffs with trading partners responding with their own countermeasures, creating ripple effects across global supply chains and investor sentiment.
It also cites mounting policy uncertainty as the main culprits behind the slowdown.
“Since the release of the January 2025 WEO Update, a series of new tariff measures by the United States and countermeasures by its trading partners have been announced and implemented, ending up in near-universal US tariff hikes on April 2 and bringing effective tariff rates to levels not seen in a century.
“This on its own is a major negative shock to growth. The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions that would constitute a basis for an internally consistent and timely set of projections.
“Given the complexity and fluidity of the current moment, this report presents a “reference forecast” based on information available as of April 4, 2025 (including the April 2 tariffs and initial responses), in lieu of the usual baseline. This is complemented with a range of global growth forecasts, primarily under different trade policy assumptions.
“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity. Under the reference forecast that incorporates information as of April 4, global growth is projected to drop to 2.8 % in 2025 and 3% in 2026—down from 3.3% for both years in the January 2025 WEO Update, corresponding to a cumulative downgrade of 0.8 percentage points, and much below the historical (2000–19) average of 3.7%,” part of the report read.
In advanced economies, growth is now expected to slow to 1.4% in 2025, with the U.S. economy seeing a notable downgrade—now projected at 1.8%, nearly a full percentage point below previous estimates.
In emerging markets and developing economies, growth is expected to slow down to 3.7% in 2025 and 3.9% in 2026, with significant downgrades for countries affected most by recent trade measures, such as China. Global headline inflation is expected to decline at a pace that is slightly slower than what was expected in January, reaching 4.3% in 2025 and 3.6% in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging market and developing economies in 2025.
The IMF flagged intensifying downside risks, warning that a deeper trade war, rising financial instability, and fragile policy buffers could worsen the economic landscape. Vulnerable emerging markets could face capital flight, currency pressures, and increasing debt burdens.
The Fund also noted that a reversal or de-escalation of current trade policies could offer a reprieve and potentially revive global growth.
“Intensifying downside risks dominate the outlook. Ratcheting up a trade war, along with even more elevated trade policy uncertainty, could further reduce near- and long-term growth, while eroded policy buffers weaken resilience to future shocks. Divergent and rapidly shifting policy stances or deteriorating sentiment could trigger additional repricing of assets beyond what took place after the announcement of sweeping US tariffs on April 2 and sharp adjustments in foreign exchange rates and capital flows, especially for economies already facing debt distress.
“Broader financial instability may ensue, including damage to the international monetary system. Demographic shifts and a shrinking foreign labor force may curb potential growth and threaten fiscal sustainability. The lingering effects of the recent cost-of-living crisis, coupled with depleted policy space and dim medium-term growth prospects, could reignite social unrest. The resilience shown by many large emerging market economies may be tested as servicing high debt levels becomes more challenging in unfavorable global financial conditions.
“More limited international development assistance may increase the pressure on low-income countries, pushing them deeper into debt or necessitating significant fiscal adjustments, with immediate consequences for growth and living standards. On the upside, a de-escalation from current tariff rates and new agreements providing clarity and stability in trade policies could lift global growth,” it added.
The report calls for coordinated policy action, urging nations to work together to restore predictability in trade, strengthen debt sustainability, and address long-term structural challenges like demographic shifts and migration.
“World Bank and IMF revise growth projections amid global economic uncertainty.”
Adnan Adams Mohammed
The World Bank Group has revised its projection on Ghana’s 2025 Gross Domestic Product (GDP) growth rate downwards by 0.4 % to 3.9% from its earlier projection of 4.3%.
The Bretton Woods institution explained that; persistent inflationary pressures and ongoing external vulnerabilities were the key reasons for the downgrade. Highlighting climate-related risks (particularly, unpredictable weather patterns that have disrupted cocoa production in Ghana), it also warned that, climate-induced events such as floods and droughts continue to erode national budget revenues across Africa by up to 9%, causing economic setbacks of between 2% and 5% in terms of growth.
The Group’s revised rate, as contained in the April 2025 edition of the Africa’s Pulse report, is significantly different from other major projections on Ghana’s economic growth in 2025. The Standard Bank has projected the highest growth rate forecast of 5.4% for Ghana in 2025 with the African Development Bank Group also forecasting 4.3% growth for Ghana in 2025 while DataBank Research predicts the lowest growth rate forecast, of 3.6% for Ghana in 2025. However, Ghana’s 2025 budget targets a real GDP growth rate of at least 4.0% and a non-oil GDP growth rate of at least 4.8%.
Meanwhile, over the medium-term, the World Bank remains cautiously optimistic about Ghana’s prospects, projecting a rebound to 4.6% growth in 2026 and 4.8% in 2027 rating Ghana among a few African economies showing early signs of recovery from 2025.
“Business activity in Mozambique and Ghana rebounded in February 2025,” the Group noted in its new report published last week. “The modest uptick in Ghana was driven by increased demand and a resurgence in new business engagements.”
High-frequency indicators, particularly the Purchasing Managers Index (PMI), suggest an uptick in business activity. Ghana’s PMI rose from 47.9 in January to 50.6 in March, indicating improved demand, easing supply bottlenecks, and renewed investor confidence following the December 2024 presidential elections.
Across the region, Sub-Saharan Africa’s economic growth is expected to rise slightly from 3.3% in 2024 to 3.5% in 2025, with further acceleration to 4.3% by 2026–2027.
However, the continent’s overall trajectory remains constrained by expected weak performances in its three largest economies—Nigeria, South Africa, and Angola. Excluding these, the rest of Sub-Saharan Africa is projected to grow by 4.6% in 2025, rising to 5.7% by 2027.
Still, the World Bank has warned that elevated downside risks—including global policy uncertainties, climate shocks, and fiscal constraints—pose ongoing threats to a sustained and inclusive recovery across the continent.
In related news, the International Monetary Fund (IMF) has sharply cut its global growth forecast 2.8% in 2025, a significant drop from the 3.3% forecast made in January, as contained in the newly published IMF’s April 2025 World Economic Outlook (WEO), which cites escalating trade tensions with the United States announcing a wave of new tariffs and trading partners responding with their own countermeasures, creating ripple effects across global supply chains and dampening investor sentiment.
It also cites mounting policy uncertainty as the other main culprit behind the lower growth forecast.
“Since the release of the January 2025 WEO Update, a series of new tariff measures by the United States and countermeasures by its trading partners have been announced and implemented, ending up in near-universal US tariffs on April 2 and bringing effective tariff rates to levels not seen in a century.
“This on its own is a major negative shock to growth. The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions that would constitute a basis for an internally consistent and timely set of projections.
“Given the complexity and fluidity of the current moment, this report presents a ‘reference forecast’ based on information available as of April 4, 2025 (including the April 2 tariffs and initial responses), in lieu of the usual baseline. This is complemented with a range of global growth forecasts, primarily under different trade policy assumptions.
“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity. Under the reference forecast that incorporates information as of April 4, global growth is projected to drop to 2.8 percent in 2025 and 3 percent in 2026—down from 3.3 percent for both years in the January 2025 WEO Update, corresponding to a cumulative downgrade of 0.8 percentage point, and much below the historical (2000–19) average of 3.7 percent,” part of the report read.
In advanced economies, growth is now expected to slow to 1.4% in 2025, with the U.S. economy seeing a notable downgrade—now projected at 1.8%, nearly a full percentage point below previous estimates.
In emerging markets and developing economies, growth is expected to slow down to 3.7% in 2025 and 3.9% in 2026, with significant downgrades for countries affected most by recent trade measures, such as China. Global headline inflation is expected to decline at a pace that is slightly slower than what was expected in January, reaching 4.3% in 2025 and 3.6% in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging market and developing economies in 2025.
The IMF has flagged intensifying downside risks, warning that a deeper trade war, rising financial instability, and fragile policy buffers, could worsen the economic landscape. Vulnerable emerging markets could face capital flight, currency pressures, and increasing debt burdens.
The Fund however noted that a reversal or de-escalation of current trade policies could offer a reprieve and potentially revive global growth.
“Intensifying downside risks dominate the outlook. Ratcheting up a trade war, along with even more elevated trade policy uncertainty, could further reduce near- and long-term growth, while eroded policy buffers weaken resilience to future shocks. Divergent and rapidly shifting policy stances or deteriorating sentiment could trigger additional repricing of assets beyond what took place after the announcement of sweeping US tariffs on April 2 and sharp adjustments in foreign exchange rates and capital flows, especially for economies already facing debt distress.
“Broader financial instability may ensue, including damage to the international monetary system. Demographic shifts and a shrinking foreign labor force may curb potential growth and threaten fiscal sustainability. The lingering effects of the recent cost-of-living crisis, coupled with depleted policy space and dim medium-term growth prospects, could reignite social unrest. The resilience shown by many large emerging market economies may be tested as servicing high debt levels becomes more challenging in unfavorable global financial conditions.
“More limited international development assistance may increase the pressure on low-income countries, pushing them deeper into debt or necessitating significant fiscal adjustments, with immediate consequences for growth and living standards. On the upside, a de-escalation from current tariff rates and new agreements providing clarity and stability in trade policies could lift global growth,” it added.
The report calls for coordinated policy action, urging nations to work together to restore predictability in trade, strengthen debt sustainability, and address long-term structural challenges like demographic shifts and migration.
“World Bank urges Ghana to adopt tough fiscal reforms.”
Adnan Adams Mohammed
As Ghana’s borrowing costs rose, escalating interest payments have crowded out critical capital investments needed for infrastructure and economic growth. Consequently, the World Bank wants Ghana to adopt tough fiscal reforms.
The latest Public Finance Review of Ghana’s economy report launched by the Bank highlights the urgent need for Ghana to reset its fiscal strategy by boosting domestic revenue, rationalizing tax exemptions, and enforcing stricter expenditure controls.
“Without deeper reforms”, the Bank warns, “Ghana risks reversing recent economic gains and prolonging financial instability”.
It recommends that “To achieve long-term stability, policymakers must curb non-essential spending, strengthen public financial management, and adopt a more disciplined fiscal framework to restore economic confidence and attract sustainable investments.”
The report attributed Ghana’s fiscal challenges to a lack of budget discipline, leading to unchecked public spending, surging interest payments, and increasing financial constraints.
The World Bank report also asserted that, excessive election-year spending, costly bailouts in the financial and energy sectors, and pandemic-related expenditures have severely strained Ghana’s fiscal space, limiting resources for productive investments.
Government spending has consistently outpaced GDP growth, with nearly 70% of total expenditure between 2010 and 2023 allocated to public sector wages, interest payments, and statutory transfers.
