Ghana's Economy Grows 6.3% as MPC Eyes Rate Cut and Gas Tariff Set to Double

Ghana’s economic landscape reveals a nation in robust recovery, with strong growth figures paving the way for monetary policy easing. However, this progress is tempered by rising cost pressures as key utilities push for significant tariff adjustments. Here’s a detailed analysis of the latest developments.

Ghana’s Economy Expands 6.3% in Q2 2025, Led by Services Surge

Ghana’s economic recovery accelerated in the second quarter of 2025, with year-on-year GDP growth reaching 6.3%, up from a revised 5.7% in the same period last year. This performance, reported by the Ghana Statistical Service, marks a strong rebound from the recent economic crisis.

The growth was primarily driven by a resurgent services sector, which expanded by 9.9%, a significant jump from the 2% growth recorded a year earlier. Key contributors included finance, insurance, trade, and education. The non-oil GDP also saw robust growth of 7.8%, as gains in agriculture helped cushion a contraction in oil production.

Government Statistician Alhassan Iddrisu highlighted that these figures reflect a strengthening recovery, bolstered by declining inflation, which fell to 11.5% in August – beating the government's year-end target of 11.9%. This stronger-than-expected growth is expected to enhance investor confidence as Ghana continues its IMF-backed reform program.

Ghana Gas Proposes 91% Tariff Hike to US$2.10/MMBtu

Ghana National Gas Limited has joined other utilities in seeking a major tariff adjustment, proposing to increase its charges by 91% from US$1.10 to US$2.10 per million metric British thermal units (MMBtu).

The company argues that this cost-reflective tariff is necessary to sustain operations, expand critical infrastructure, and ensure the long-term reliability of Ghana's natural gas transmission system. According to Sylvester Enumi Cudjoe, Manager of Commercial Operations at Ghana Gas, the proposed adjustment accounts for capitalized expenses, approved short-term investments, and revenues from natural gas liquids.

This proposal is part of a broader wave of utility tariff hikes under PURC review, following similar requests from Ghana Water Limited (281% hike), ECG (224%), and NEDCo (171%). Ghana Gas emphasizes that the increase is essential for supporting industrialization, enhancing energy security, and facilitating the transition to cleaner fuels.

Bank of Ghana Poised for Second Rate Cut in September 2025

The Monetary Policy Committee (MPC) of the Bank of Ghana is expected to continue its dovish stance with a second successive policy rate cut at its September 2025 meeting.

According to IC Research, the current inflation environment – with headline inflation at 11.5% – translates to an ex-post real policy rate of 13.5%. Without a rate cut, this could widen to 15.4% in September, creating room for monetary easing. The research firm forecasts a 300 basis points reduction, bringing the policy rate to 22.0%.

This anticipated cut follows July's 300 basis points reduction to 25.0% and reflects the continued disinflation trend. IC Research projects further disinflation in September 2025, driven by favorable base effects, sustained transport fare deflation, and ongoing food price declines amid crop harvests.

Investor’s Insight – GCB Bank Soars with 90.27% YTD Gain

Amid these macroeconomic developments, GCB Bank shares have reached a new all-time high, recording an impressive 90.27% year-to-date gain. This stellar performance reflects strong investor confidence in Ghana's banking sector and the broader economic recovery, making financial stocks an attractive proposition for investors seeking exposure to Ghana's growth story.

This developments present a complex but promising picture of Ghana's economy. The strong GDP growth and declining inflation create a favorable environment for monetary policy easing, which could stimulate further economic activity. However, the proposed utility tariff hikes represent a significant upside risk to inflation in the medium term.

The MPC faces a delicate balancing act – supporting economic growth through rate cuts while remaining vigilant about potential inflationary pressures from utility adjustments. For investors, Ghana's recovering economy offers attractive opportunities, particularly in the financial sector, though utility tariff developments warrant close monitoring.

Stay tuned to the Cedi Board® for real-time updates on Ghana’s financial pulse. From prices and policy to investment tips that help you make sense of the numbers.