Fitch Solutions projects that Ghana’s real household spending will expand by 2.5% year-on-year in 2025, after a slight 1.1% increase in 2024. This anticipated growth is forecasted to elevate total household expenditure to GH¢129.7 billion, marking a 25.4% surge compared to the pre-pandemic figure of GH¢103.4 billion recorded in 2019.
The firm links this growth to decreasing inflation and stronger cedi stability expected in 2025, which they predict will enable the Bank of Ghana (BoG) to adopt a more flexible monetary stance.
“We will see an improvement in Ghanaian household spending over 2025, as households rally from elevated inflation and cedi weakness. Following the presidential elections in December 2024, consumer activity is already beginning to rebound, and with cooler levels of price growth, greater cedi stability, and a dovish approach from the Bank of Ghana, households will see a marked uptick in purchasing power and will support a rebound in both essential and discretionary segments,” the rating agency said.
Mobile money transactions have also surged to unprecedented levels, with December 2024 volumes climbing to a record GH¢745.0 million, up from GH¢678.8 million in July 2024. This jump highlights a post-election revival in consumer engagement.
“While inflation remains a key driver of the growth of the value of mobile money transactions, the rate of growth is considerably above the level of inflation and is therefore pointing to a consumer recovery story, which is reflecting in strong spending growth figures over second half of 2024 and into 2025,” the firm observed.
Fitch Solutions added that subdued inflationary pressures in 2025 are likely to further perk up household expenditure and mobile money usage, while also reducing the burden of debt servicing costs.
For households, these developments signal a potential improvement in everyday financial conditions. In practical terms, with slower inflation and improved cedi stability, the money households earn can buy more goods and services. This means that the cost of everyday items may not rise as sharply, allowing families to maintain or even improve their living standards.
A more accommodative monetary policy from the Bank of Ghana could translate to lower interest rates. This, in turn, can reduce the cost of servicing debts, freeing up more disposable income for essential needs and discretionary spending.
The rebound in spending and the surge in mobile money transactions also suggest that households are regaining confidence in the economy. This renewed confidence can encourage more spending, further fueling economic recovery.
Overall, these factors combine to create an environment where households are better positioned to meet their daily needs while also having the flexibility to invest in non-essential items, potentially improving their overall quality of life.
