It is emerging that the expenditure of consumers is the major carrier of Ghana’s economy as government spending has significantly dwindled.
This means that the 5.5% economic growth recorded in the third quarter of 2025 was on the shoulders of household expenditure, which significantly surged.
The latest GDP data for Q3 published by the Ghana Statistical Service explains that when the GDP growth is considered from the perspective of expenditure, the 5.5% growth was largely dependent on the private consumer, who is acting as the unexpected lifeline for the entire economy.
The Citizens’ Economic Rescue
The true engine of growth during this period was Household final consumption expenditure, which represents the spending power of everyday individuals and families. This spending surged by a substantial 16.9 percent year-on-year.
Practically speaking, this means the economy is being carried on the shoulders of the consumer. This means a surge by households to buy more goods, frequent services, and drive demand, whether they are purchasing vehicles, upgrading appliances, or simply spending more on daily necessities.
This immense consumer demand is the primary fuel keeping the national economy moving forward.
The Fiscal Handbrake: Government Pulls Back
In contrast to this consumer spending spree, the government expenditure, which is often considered the highest spender, was subject to a severe fiscal squeeze, likely driven by national budget balancing efforts.
The GSS data reveal that the government’s final consumption expenditure plummeted by -16.4 percent. This is a massive cut that suggests a sharp reduction in government purchases of goods and services, fewer public projects, and potentially less spending on public sector activities and wages.
In another interesting turn of events, the “near collapse” in public spending was further compounded by a near-total cessation of consumption by non-governmental charitable institutions.
Final consumption by Non-Profit Institutions Serving Households (NPISH) fell by an astronomical -97.1 percent, signalling almost a total collapse.
In simple terms, for every cedi the government cuts from its operations is a loss to the non-profit sector spending. This means that households had to step in and spend their own money to keep the national growth rate stable.
“The growth of 5.5 percent in real GDP by the expenditure approach to measuring gross domestic product (GDP) was driven by Household final consumption expenditure (16.9%), Gross capital formation (15.6%), and Net exports (-7,494.8%) in Q3 2025. This was partially offset by a fall in Government final consumption expenditure (-16.4%) and NPISH final consumption (-97.1%),” the GSS document read.
Why This Contrast Matters
The sharp difference between a 16.9% consumer surge and a -16.4% government plunge creates a perilous imbalance.
To put it practically, if the economy were a heavyweight being lifted, the government’s side of the rope is being slackened severely, forcing the consumer’s side to tighten and strain under nearly all the pressure.
Analysts explain that while robust household spending is desirable, relying almost entirely on private consumption while public sector spending retracts so dramatically is not sustainable, as it risks overwhelming household finances and dampening future growth prospects if that spending power diminishes.
