Ghana’s fragile economic recovery could face renewed strain as weak household consumption and persistently high unemployment rates emerge as the most significant threats to growth, according to a new assessment by Databank Group Research.
In its latest economic outlook, the research arm of the leading investment firm cautioned that while macroeconomic indicators may show signs of gradual stabilisation, underlying structural challenges — particularly subdued consumer spending and joblessness — could undermine the pace and sustainability of recovery.
Consumption Slows Despite Stabilisation Efforts
According to the report, private consumption — a key driver of Ghana’s Gross Domestic Product (GDP) — remains weak due to declining disposable incomes, high living costs and tight financial conditions.
Although inflationary pressures have eased compared to peak levels recorded during the economic downturn, many households continue to struggle with elevated prices of essential goods and services. This has constrained spending power and dampened overall economic activity.
Databank Research noted that without a strong rebound in household consumption, economic growth may remain below potential, as domestic demand plays a central role in stimulating production, investment and job creation.
High Unemployment Undermines Growth Momentum
The report further highlighted unemployment as a major structural risk to Ghana’s economic rebound. Persistent joblessness, particularly among the youth, continues to weaken household income levels and reduce consumer confidence.
Analysts warned that high unemployment not only affects short-term economic performance but also poses long-term socio-economic risks, including rising inequality and increased vulnerability among low-income households.
“Without meaningful job creation and sustained income growth, the recovery process could remain uneven and fragile,” the research firm cautioned.
Policy Discipline Not Enough Without Demand Recovery
While acknowledging the government’s fiscal consolidation efforts and improvements in macroeconomic management, Databank Research stressed that stabilisation alone may not guarantee strong recovery.
The report argued that for Ghana to achieve durable economic growth, policymakers must prioritise strategies that stimulate demand, promote private sector expansion and create employment opportunities.
This includes targeted support for small and medium-sized enterprises (SMEs), enhanced access to credit, and investment in sectors capable of absorbing large segments of the labour force.
Call for Balanced Economic Strategy
The research firm urged a balanced approach that combines fiscal discipline with growth-oriented interventions. It warned that excessive austerity without parallel measures to boost economic participation could suppress consumption further and prolong recovery.
As Ghana navigates its post-crisis rebuilding phase, Databank Research emphasised the need for coordinated policies that restore confidence, increase productivity and create sustainable jobs.
The report concludes that while macroeconomic indicators may show improvement, the true test of recovery lies in stronger consumer activity and lower unemployment — factors it describes as the “critical pillars” of a resilient and inclusive economy.
