Govt poised to exceed 2025 economic targets — IC Research

By Rebecca Okine

The government is projected to surpass all its macroeconomic targets for 2025, buoyed by strong performances in the first half of the year across key indicators such as inflation, exchange rate stability, interest rates, real GDP growth, and gross international reserves.

According to IC Research, a leading economic and financial analysis firm, the 2025 Mid-Year Review Budget showed robust results, with fiscal adjustments outperforming both government projections and the firm’s own estimates.

The report credits tighter spending controls, avoidance of arrears accumulation, and stronger-than-expected tax revenue collection for the positive outlook, despite shortfalls in non-tax revenue.

“Our review of the fiscal data indicates renewed commitment to spending controls and non-accumulation of arrears amid a largely satisfactory tax revenue outturn, despite underperformance in non-tax revenue. Against the backdrop of better-than-expected fiscal outturn, the authorities appear strongly optimistic about achieving the end-2025 macro-fiscal targets, as all year-end targets were retained,” the report stated.

The firm noted that the strong delivery on targets in the first half of the year has helped ease post-2024 concerns about the near-term fiscal outlook, although risks to budget execution remain.

It acknowledged that the fiscal authorities have identified these risks and outlined mitigation strategies, some of which IC Research believes are credible.

Revenue Performance Mixed

Total revenue and grants reached GHS99.3 billion, equivalent to 7.1 percent of GDP, falling short of the half-year target by 3.2 percent. However, this figure was still 8.3 percent higher than IC Research’s own forecast, driven by intensified tax compliance efforts despite the absence of significant new revenue measures in the budget.

Non-tax revenue was a notable weak point, totaling GHS10.2 billion, which was 19.1 percent below target. This was mainly due to lower-than-expected collections from state agencies. Customs revenue also underperformed, with collections of GHS10.96 billion missing the target by GHS1.6 billion, or 12.7 percent. The shortfall was attributed to persistent systemic leakages at key entry points, notably the Tema Port, as well as smuggling across land borders.

IC Research noted that the government has already flagged these revenue challenges as potential threats to budget performance and has committed to measures aimed at curbing leakages and improving enforcement.

Outlook for Second Half of 2025

The Energy Sector Levy Act (ESLA) is expected to remain a strong revenue driver in the second half of the year, helping offset some of the underperformance in customs and non-tax collections.

Overall, IC Research maintains a positive outlook, noting that with disciplined fiscal management and effective risk mitigation, the government could achieve even better-than-projected macroeconomic outcomes by year-end. This would bolster investor confidence and reinforce economic stability.