Ghana’s fiscal deficit projected at 3.9% for 2025 – IC Research

Ghana’s fiscal deficit is projected to close 2025 at 3.9% of Gross Domestic Product (GDP), slightly above the government’s target of 3.8%, according to economic think tank IC Research.

In its review of the 2025 Mid-Year Budget, IC Research said the government’s sustained expenditure rationalisation in the second half of the year, coupled with measures to boost revenue, will drive the projected outcome.

It noted that the strong spending restraint in the first half of 2025 has eased concerns over the near-term fiscal outlook, though risks remain from payroll costs and mounting energy sector obligations.

Despite narrowing the overall deficit target, the government kept the primary surplus target unchanged at 1.5% of GDP. IC Research explained that this decision reflects an unexpected GH¢2.9 billion increase in energy sector obligations, raising the total to GH¢30.0 billion for 2025 — with 94.1% of the increase already paid by mid-year.

The report revealed that while the Electricity Company of Ghana largely complied with the Cash Waterfall Mechanism in the first five months of 2025, a GH¢103.4 million shortfall in January and likely under-collection in the first half contributed to the unplanned payments.

This payment volatility in the energy sector, IC Research warned, continues to cast uncertainty over the short-to-medium-term fiscal outlook.

The government had earlier revised its 2025 fiscal deficit target down to 3.8% of GDP from 4.1% after better-than-expected performance in the first half of the year, with the finance minister pledging to restore public finances to a sustainable path.