The government is expected to achieve better-than-targeted outcomes for all its macro targets in 2025.
According to IC Research, a leading economic and financial outfit, this is based on the impressive performances on key macroeconomic indicators in the first-half of 2025, including inflation, exchange rate, interest rate, real GDP growth (1Q2025), and gross international reserves.
In its critique of the 2025 Mid-Year Review Budget, IC Research said the budget execution for half-year 2025 delivered strong performances with a sizable fiscal adjustment outperforming the authorities’ target and its estimates for the period.
“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 the year-end targets were retained”, it mentioned.
Similarly, it said the strong half-year 2025 delivery on key targets has significantly eased the post-2024 concerns on the near-term fiscal outlook, although risks to budget execution persist.
It continued that the fiscal authorities have rightly identified some key risks to the 2025 budget execution and outlined some mitigation measures, some of which we believe are credible mitigants.
Total Revenue Underperform
Meanwhile, total revenue surged despite disappointing customs and non-tax revenue collections, while the Energy Sector Levy Act shines bright in the second-half of 2025 prospect.
Total revenue and grants fell short of the half-year 2025 target by 3.2% at GH¢99.3 billion (7.1% of Gross Domestic Product).
It beat IC Research’s estimate by 8.3% as the authorities intensified tax compliance amid limited new revenue measures in the budget.
“We note a disappointing outturn in non-tax revenue (GH¢10.2 billion), which fell short of target by GH¢2.4 billion (or -19.1%), mainly reflecting lower-than-expected revenue collections by state agencies. Also, customs collection (GH¢10.96 billion) underperformed the target by GH¢1.6 billion (or -12.7%) attributed to systemic revenue leakages at key ports, especially the Tema Port, as well as smuggling of goods across land borders.
Unsurprisingly, the authorities flagged this revenue source as one of the likely headwinds to budget performance, outlining measures to limit the risk.
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