“IFS Highlights Fiscal Challenges and Opportunities”

Story by Fada Amakye

Ghana’s economy has demonstrated notable improvements in macroeconomic indicators, according to Leslie Dwight Mensah, Research Fellow at the Institute for Fiscal Studies (IFS). In a recent fiscal policy review, Mensah highlighted that the country’s economic growth, inflation, and exchange rates have shown significant signs of recovery.

The economy grew by 5.3% in the first quarter of 2025, driven primarily by the services and agriculture sectors. The agricultural sector surged by 6.6%, with the fishing sub-sector recording a remarkable 16.4% growth rate. The service sector also grew by 5.9%, driven by strong performances in information and communication technology (13.1%) and financial services (9.3%).

Headline inflation dropped significantly from 23.8% in December 2024 to 13.7% as of June 2025. This represents a significant breakout, given that headline inflation rates ranged from 20.4% to 25.8% throughout 2024.

Despite the positive macroeconomic trends, the IFS highlights fiscal challenges that need to be addressed. The institute took a great interest in the media fiscal review, particularly in understanding the execution of the 2025 budget during the first half of the year. The budget had introduced many new policy initiatives, and the IFS aims to provide policy recommendations to address the fiscal challenges facing the country.

The IFS recommends that the government prioritize fiscal discipline and transparency to ensure the sustainability of the economic recovery. This includes implementing structural reforms, improving tax compliance, and enhancing public financial management.

Ghana’s economic recovery is a positive development, but it requires sustained efforts to maintain stability and promote growth. The IFS’s analysis and recommendations provide valuable insights for policymakers to address the fiscal challenges and ensure a more stable and prosperous economic future for the country.