Market Update: Growth returns to industry as economy grows 3.8% – Full Analysis

By Joshua Worlasi AMLANU

Economic activity expanded by 3.8 percent in October 2025, supported mainly by strong performance in the services and industry sectors, according to provisional data from the Ghana Statistical Service’s Monthly Indicator of Economic Growth (MIEG).

The latest reading reinforces signs that output is firming after a prolonged adjustment period, even as growth remains uneven across sectors.

The October outturn represents an improvement on the same period a year earlier and extends a gradual upward trend evident since late 2023. Services continued to anchor growth, expanding by 5.5 percent year-on-year and accounting for nearly three-quarters of total economic expansion during the month.

The sector contributed about 2.8 percentage points to the overall 3.8 percent growth rate, underpinned by gains in information and communication as well as wholesale and retail trade. The strong output highlights the sector’s growing weight in Ghana’s output mix, even as other parts of the economy struggle to regain momentum.

Industry, which had lagged for much of the previous year, showed clearer signs of recovery. Output in the sector rose by 3 percent in October, a marked improvement from the subdued performance recorded in the same period of 2024. Manufacturing activity drove much of the rebound, helping industry contribute about 1.1 percentage points to overall growth. The turnaround suggests easing constraints in production and trade, although analysts caution that the recovery remains fragile.

Agriculture recorded positive but modest growth of 0.9 percent, reflecting the sector’s seasonal patterns and slower expansion compared with last year. Its contribution to overall growth was marginal at around 0.05 percentage points, underlining the uneven nature of the current recovery and the continued reliance on services for headline growth.

Presenting the data in Accra, Government Statistician Dr. Alhassan Iddrisu said the figures point to continued resilience in economic activity, while stressing the need for careful interpretation given the experimental and provisional nature of the indicator.

“The Monthly Indicator of Economic Growth is designed to provide a timely, high-frequency signal on how the economy is performing before the release of quarterly GDP,” Dr. Iddrisu said. “The October results show that economic activity continues to trend upward, with services and industry playing a dominant role.

However, users should note that the MIEG relies on the first available data and is not seasonally adjusted, which means revisions are possible as more comprehensive information becomes available.”

He added that the strength in services reflects structural shifts that have been building over time, particularly the rising importance of communication and trade-related activities in driving output and employment. Industry’s rebound, he said, was encouraging but would need to be sustained to support broader-based growth.

The October figures align broadly with other high-frequency indicators pointing to strengthening momentum in the second half of the year. In its November 2025 monetary policy report, the Bank of Ghana said domestic growth continued to gain traction following a strong GDP outturn of 6.3 percent in the first half of the year.

The central bank noted that earlier MIEG data showed provisional growth of 5.1 percent in August, driven mainly by services and agriculture, while its own Composite Index of Economic Activity posted a 9.6 percent increase by the end of September.

According to the bank, industrial production, international trade activity, private-sector credit and consumption all contributed to the improvement in the composite index. Confidence surveys conducted in October also pointed to more optimistic expectations about current and future economic conditions, supported by an improvement in the Purchasing Managers’ Index as new orders picked up.

Taken together, policy-makers argue that these trends suggest Ghana’s negative output gap is narrowing. “These gains indicate that the negative output gap is closing,” the central bank said in its monetary policy committee report.

It added that if momentum is maintained, overall GDP growth for the year should remain strong.

The improving growth development is feeding into policy debates at a time when inflation has declined significantly but financial conditions remain slippery.

Nonetheless, broad improvements in macroeconomic conditions, supported by a build-up of foreign exchange reserves and the ensuing stability of the cedi, are expected to further anchor inflation expectations.

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