The International Monetary Fund is forecasting a Gross Domestic Product growth rate of 0.9% for Ghana this year, according to its October 2020 World Economic Outlook Report.

The forecast is slightly below the ones being projected by the World Bank, Fitch Solutions and the Bank of Ghana.

Whilst the World Bank is predicting a GDP growth rate that will make the country a top performer in Sub Saharan Africa, Fitch Solutions is predicting a GDP growth rate of 1.3%, also making Ghana an outperformer in the Sub Saharan African region.

However, the Fund is forecasting a GDP of 4.2% for 2021 and 4.5% in 2025 respectively.

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.  

With the exception of Ivory Coast (1.8%), Ethiopia (1.9%), Kenya (1.0%) and Tanzania (1.9%), the country will outperform 46 Sub Saharan African countries.

Growth on the continent will also contract by 3.0% with both South Africa (-8.0%) and Nigeria (-4.3%) recording huge negative growth rates.

Global growth rate

The International Monetary Fund said global growth is projected at –4.4% in 2020, 0.8 percentage point above the June 2020 World Economic Outlook Report Update forecast.

“The stronger projection for 2020 compared with the June 2020 WEO Update reflects the net effect of two competing factors: the upward impetus from better-than-anticipated second quarter GDP outturns (mostly in advanced economies) versus the downdraft from persistent social distancing and stalled reopening in the second half of the year”.

Global growth is however projected at 5.2 percent in 2021, 0.2 percentage point lower than in the June 2020 WEO Update.

The projected 2021 rebound following the deep 2020 downturn, implies a small expected increase in global GDP over 2020–21 of 0.6 percentage point relative to 2019, the Fund said.

Q2 GDP results

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

According to figures released by the Ghana Statistical Service, the heavy fall was largely attributed to some restrictions on activities in the economy, 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%.