Ghana’s economy recovered strongly during the second quarter of this year and is expected to continue for the remaining quarters of the year, despite the presence of covid-19.
According to Fitch Solutions, research arm of ratings agency, Fitch, its data suggests that the economy is on a strong rebound, consistent with the Bank of Ghana’s Composite Index of Economic Activity as well as Business and Consumer Confidence Survey.
During the second quarter of last year, the economy contracted by -3.2% and entered into a mild recession in the third quarter. However, it bounced back to record a modest 0.4 percentage points growth in the final quarter.
It has since been on a growth trajectory though the Central Bank’s May 2021 survey indicated that consumer confidence dipped slightly in April 2021 on account of increases in petroleum prices at the pump, new taxes, and transportation fares. At the same time, optimism of businesses observed also softened though businesses expressed confidence about their company and industry prospects, going forward.
The economy expanded by 3.1% in the first quarter of this year, aided by Construction (14.2%), Manufacturing (6.1%) as well as Information and Communication (22.1%) sub sectors.
But it was lower than what was realized the same period in 2019.
“High frequency data suggests strong recoveries in Kenya, Uganda and Ghana, while weak Q12021 Gross Domestic Product readings for South Africa and Mozambique point to a muted outlook for Southern Africa”, it pointed out.
It further said “although Ghanaian GDP data have not yet been published at the time of writing, PMI readings and the Central Bank’s composite indicator of economic activity both indicate robust growth in economic activity in the first months of 2021.”
Meanwhile, Fitch Solutions expects the Policy Rate-the rate at which Bank of Ghana lends to commercial banks to remain same at 13.5% for the rest of the year to support economic recovery.
Senior Risk Analyst in charge of sub-Saharan Africa at Fitch Solutions, William Attwell said the policy rate will be kept at it current level to stimulate economic recovery.
“Our view now is that we expect the Central Bank to hold the benchmark interest rate at its currently level -13.5% until the end of the year. This is to enable the eceonomic recovery to gain momentum in the coming months”.
He added “we expects Ghana’s economy to be among the strongest economies in sub-Sahara Africa this year, growing around 4.5%. We think vaccines rollout in the coming months will help check covid-19 infections.”
Economy expanded by 3.1% in quarter one
The Ghanaian economy expanded by 3.1% in the first quarter of this year, the lowest since the same period in 2019.
However, in the same period of 2020, the GDP growth rate was 7.0%.
According to figures from the Ghana Statistical Services, Construction (14.2%)), Manufacturing (6.1%) as well as Information and Communication (22.1%) sub sectors were the main drivers of growth for the first three months.
The Agriculture sector recorded the highest growth of 4.3% and was followed by the Services sector with a growth of 4.0%. The Industry sector expanded by a paltry 1.3%.
- Video of unknown driver driving dangerously in Accra goes viral
- Police arrest man driving dangerously in viral video
- Reckless driver in viral video to appear in court on Monday
- Iranian governor slapped in the face during public speech
- 38 persons arrested for alleged assault on police officers
- Colombia’s most wanted drug lord Otoniel captured
- Assistant police chief claims she was told to get abortion to keep her job
- NCA backtracks on Radio Gold, others not having their original frequencies
- NIA to suspend services at all 34 registration centres from Oct. 25
- CAF Champions League: Hearts of Oak poised to make history ahead of second leg against Wydad
Real Madrid win fourth consecutive El Clasico as Alaba scores in victory against Barcelona
Agric Minister stopped my bid to introduce fertiliser manufacturing plant – Entrepreneur
Samuel Dowuona: Facebook outage; a single-point-of-failure lesson for Ghana
You’ll be held liable for sending false information – Bernard Agortey
It’s been too stressful using Ghanaian passport – Gary Al-Smith
I resigned from Shatta Movement when Shatta Wale started misbehaving – Ken Addy
Reality Zone with Vicky Wireko: Covid-19 eventuality – A fourth wave approaching
Crime rate in Tema Police Region improved – Crime Officer
Child beggars invade commercial roads of Bolgatanga
Beautician appears before court for fraud
Alfred Ogbamey: Shatta Wale, Medikal and normalisation of prosecutorial and judicial absurdities
Law on false publication should be a wake-up call to Ghanaians – Lawyer
AfCFTA will only succeed if RECs and protocols are addressed – Wendell Addy
Reckless driver in viral video to appear in court on Monday
Playback: The Law discusses fear, panic and gun brandishing culture