UK based research and market information firm, Fitch Solutions, has revised its growth rate forecast for Ghana in 2023.

It is projecting a modest 2.9% Gross Domestic Product (GDP), the lowest since pre-Covid-19 pandemic in 2015.

Its projection is however 0.1% higher than the government forecast of 2.8% in 2023.

According to Fitch Solutions, subdued consumer spending will be the major cause to the slowdown in the economy in 2023.

Senior Risk Analyst at Fitch Solutions, Mike Kruninger, said the projection is based on Ghana’s quest to secure a programme from the International Monetary Fund.

“One of the main reasons why economic activity will slow down next year [2023] is the weak outlook of consumer spending, which typically is the engine of Ghana’s economy.”

“What we expect is inflation to come down, starting early next year. This will be gradual, meaning for the large part of 2023, inflation will remain very elevated”, further eroding the purchasing power of households and this weighing on private consumption”, he pointed out.

He added that the expected high inflation is backed by the Bank of Ghana’s consumer and business confidence indicators which show that private sector sentiment is indeed severely subdued.

Fitch Solutions had surprisingly in October 2022 projected a 4.6% growth rate for Ghana in 2023.

This was higher than the 2.8% forecast by the International Monetary Fund, and most institutions.

In July 2022, it revised Ghana’s Gross Domestic Product (GDP) growth rate in 2022 to 2.6%, from an earlier forecast of 4.8%.

However, it said in its Quarterly Sub Saharan Africa Macroeconomic Update that the economic growth forecast is premised on an expected deal with the International Monetary Fund before the end of 2022.