Ghana’s economy contracted again for the second consecutive period in the third quarter (-1.1%) this year, but at a lower rate than in the second quarter.

This is however compared with a Gross Domestic Product (GDP) growth rate of 5.6% the same period last year.

The contraction of the economy in the third quarter is largely due to the impact of covid-19 pandemic which saw the economy being largely tightened during the period.

According to figures from the Ghana Statistical Service, the economy with oil contracted by 1.1%, but grew by -0.4% without oil. 

The Agriculture sector recorded the highest growth of 8.3%, whilst Industry and Services sectors contracted by -5.1% and -1.1% respectively.

With the exception of Forestry and Logging sub-sector that contracted, all the other sub-sectors expanded in growth in quarter three 2020.

Whilst, the Fishing sub-sector expanded by 20.4%, the Crops sub-sector grew by 9.0% in the third quarter of 2020.

For Industry, the Mining and Quarrying sub-sector contracted by 16.9%. Electricity and Manufacturing on the hand expanded by 9.0% and 4.0% respectively.

With regard to Services sector,  as usual Hotels & Restaurants sub-sector contracted 62.1%, whereas the Trade, Repair of Vehicle, Household Goods sub-sector contracted by 7.7%.

However, Information & Communication sub-sector recorded the biggest growth of 51.3%, followed by Real Estate and Professional, Administrative & Support with GDP of 12.2% and 9.3% respectively.

In terms of size of the sectors, the Services sector was the largest sector of the Ghanaian economy in the third quarter of 2020 with a share of 42 percent of GDP at basic prices. The GDP share of Industry and Agriculture were 35 percent and 23 percent respectively.

IMF, World Bank, Fitch forecast GDP of between 0.8 and 1.2% in 2020

The International Monetary Fund had earlier forecast a GDP growth rate of 0.9% for Ghana in 2020, according to its October 2020 World Economic Outlook Report.

Whilst the World Bank predicted a GDP growth rate [0.8%] that will make the country a top performer in Sub Saharan Africa, Fitch Solutions projected a GDP growth rate of about 1.2%, also making Ghana an outperformer in the Sub Saharan African region.

However, the three institutions projected a GDP of between 4.2-4.8% in 2021.

That will come as a big omen for government, enterprises and consumers as tax revenue, earnings and disposable income is expected to shoot up.

The reason is due to an expected significant jump in economic activities that will stimulate demand and supply.

Q2 GDP results

Ghana’s economy contracted by -3.2% in the second quarter of this year, the first time it had contracted since 1983.

According to figures by the GSS, the heavy fall was largely attributed to some restrictions on economic activities, which virtually came to a standstill during the partial lockdown period, as a result of the Coronavirus outbreak.

The information and communication sub-sector recorded the highest expansion of 74.2%, while the hotel and restaurants sub-sector also recorded the highest contraction of -79.4%.