Ghana is expected to record its first current account surplus in 20 years in 2023, Fitch Solutions has predicted.

According to the UK-based firm, Ghana will record a current account surplus of 1.3% of Gross Domestic Product in 2023, from a deficit of 2.1% of GDP in 2022.

“Our 2023 forecast, which marks a revision from our previous projection that Ghana’s current account balance would post a deficit of 0.9% of GDP, follows weaker than anticipated import growth in half-year of 2023. Indeed, merchandise imports contracted by 13.0% year-on-year in half-year 2023 as a result of weak domestic demand and lower global commodity prices”.

Meanwhile, exports fell by 7.2%, pushing up the trade surplus to $299.6 million, from $245.7 million first-half of 2022.

Data released by the Bank of Ghana (BoG) shows that the overall current account balance posted a surplus of $0.8 billion in the first-half of 2023, compared to a deficit of $1.1 billionn in the corresponding period of 2022.

“We expect that the trade surplus will remain large by historical standards in second half of 2023. Imports will continue to contract as domestic conditions remain weak”, it stated.

“Indeed, inflation – which averaged 46.2% y-o-y in half-year 2023 – will remain elevated over the coming months, averaging 40.6% through 2023, the highest annual rate since 1996. This will weaken purchasing power of households and constrain demand for imported consumer products”, Fitch Solutions added.

Meanwhile, the UK-based firm says restrictive monetary conditions will curtail the ability of businesses to fund their growth initiatives and will lead to a delay in corporate expansion plans, limiting demand for imported capital inputs.