Ghana’s economy showed signs of strengthening momentum in October 2025, recording a provisional growth rate of 3.8%, up from 3.0% in the same period a year earlier, according to the Monthly Indicator of Economic Growth published by the Ghana Statistical Service. While the data point to a modest recovery driven by services and industry, tight credit conditions in the banking sector highlight ongoing constraints facing businesses and households.
The services sector remained the backbone of economic expansion, growing by 5.5% in October. Although slightly lower than the 5.6% recorded a year earlier, services accounted for nearly three-quarters of total economic growth, reflecting the sector’s dominant role in Ghana’s economy. Key contributors included communications, wholesale and retail trade, and other service-based activities, which have remained relatively resilient despite high interest rates and elevated living costs.
Industrial activity also improved markedly, with the sector expanding by 3.0% in October, compared with just 0.4% in the same month in 2024. The rebound suggests a gradual recovery in manufacturing and extractive activities, supported by improved energy availability and stabilising macroeconomic conditions following earlier fiscal and balance-of-payments pressures.
By contrast, agriculture continued to underperform. The sector grew by just 0.9%, down from 2.1% a year earlier, contributing only marginally to overall growth. Analysts attribute the слаб pace to structural challenges, including climate-related shocks, high input costs, and limited access to finance for smallholder farmers. Given agriculture’s importance for employment and rural incomes, its weak performance raises concerns about inclusive growth and food security.
Despite the improved headline growth figures, conditions in the financial sector suggest that the recovery remains fragile. The Bank of Ghana’s latest Banking Sector Development report shows that net credit flows fell sharply to GH¢8.6 billion by the end of October 2025, representing a steep year-on-year decline. This compares with more than GH¢20 billion in net credit flows during the same period in 2024.
The slowdown reflects a significant contraction in public sector borrowing. Credit to the public sector declined by 45.2% in the year to October, reversing an expansion recorded a year earlier. The central bank said this trend was consistent with ongoing fiscal consolidation efforts, as the government sought to rein in deficits and stabilise debt levels under its broader economic reform programme.
While reduced government borrowing may ease pressure on domestic interest rates over time, it has also coincided with cautious lending behaviour by banks. Financial institutions have continued to favour investments in government and Bank of Ghana securities, reflecting risk aversion and concerns about asset quality following recent economic turbulence.
Private sector credit continued to grow, expanding by 13.9% in the year to October 2025. However, this marked a slowdown from the 28.8% growth recorded a year earlier, underscoring the impact of tight monetary conditions. Nominal private sector credit stood at nearly GH¢99 billion at the end of October, up from about GH¢87 billion a year earlier.
A closer look at lending patterns shows that credit growth has been uneven across sectors. Services absorbed the bulk of new private sector lending, accounting for more than three-quarters of annual credit flows. Manufacturing also attracted a larger share of credit than a year earlier, while mining and quarrying saw a notable increase in lending, reflecting renewed investor interest in extractive activities.
Economists say the combination of stronger output growth and constrained credit presents a mixed picture for Ghana’s economic outlook. On the one hand, improved performance in services and industry suggests that confidence is gradually returning and that recent macroeconomic stabilisation measures are beginning to take effect. On the other, limited access to credit risks holding back investment, job creation and productivity growth, particularly for small and medium-sized enterprises.
High borrowing costs remain a major challenge. Although inflation has eased from recent peaks, interest rates remain elevated, discouraging private investment and consumer spending. Businesses, especially in manufacturing and agriculture, have warned that without cheaper and more accessible credit, growth gains could prove short-lived.
For policymakers, the October figures underline the delicate balance between restoring fiscal discipline and supporting economic expansion. Sustained growth will depend not only on maintaining macroeconomic stability, but also on unlocking credit to productive sectors, strengthening agriculture, and ensuring that recovery translates into broad-based improvements in living standards.
As Ghana looks ahead to the final months of 2025, the data suggest cautious optimism tempered by structural constraints. The economy is growing again, but the pace and quality of that growth will depend on whether tighter financial conditions ease enough to allow businesses and households to fully participate in the recovery.
