The S&P Global Purchasing Managers' Index (PMI) has signaled a better private sector business environment in Ghana.

It index increased from 50.5 in July to 51.9 in August, as output and new orders sharply increased.

This was captured in the October 2023 Africa Pulse Report by the World Bank.

The report said employment grew for a ninth straight month, and supplier delivery times shortened.

On the other hand, S&P PMI said high inflationary pressures coupled with weaknesses in the financial and energy sectors will weigh on growth of private consumption and investment.

Again, fiscal consolidation, spearheaded by the tax increases enacted in April 2023, will constrain aggregate demand.

“The non-extractive sector will drive the slowdown of the economy”, it pointed out.

“Agricultural activity will be affected by high input prices (for instance, fertilizers) and the fallout from the swollen shoot virus infecting cocoa trees”, it added.

“High interest rates will disincentivize investments in non-extractive sectors, while fiscal consolidation will impact public services”, it concluded.

Ghana's first quarter growth rate exceeded market expectations

The World Bank also said during the first quarter of 2023, economic performance in Ghana exceeded market expectations.

GDP growth accelerated to 4.2% year-on-year, from 3.2% in the last quarter of 2022.

The Agriculture and the Service sectors where the largest contributors to the acceleration of growth, while industrial output—particularly construction—recorded a downturn.